31 Dec B) When first-time buyers

Strengthening a Company’s Competitive Position: Strategic Moves, Timing, and Scope of Operations

1 Which one of the following is not a factor that makes an alliance “strategic” as opposed to just a convenient business arrangement?

A) The alliance involves joint contribution of resources and is mutually beneficial.

B) The alliance helps block a competitive threat or open up new market opportunities.

C) The alliance helps mitigate a significant risk to a company’s business.

D)The alliance helps build, enhance, or sustain a core competence or competitive advantage.

E) The alliance is critical to the company’s achievement of an important objective.

2 Companies are motivated to enter into strategic alliances or cooperative arrangements

A) to expedite the development of promising new technologies or products.

B) to bring together the personnel and expertise needed to create desirable new skill sets and capabilities to improve supply chain efficiency, and/or gain economies of scale in production and/or marketing.

C) to acquire or improve market access through joint marketing agreements.

D) to help win the race against rivals for global market leadership.

E) All of these.

3 The best strategic alliances

A) aim at teaming up with world-class suppliers or else companies with world-class know-how in product innovation.

B) are those whose purpose is helping a company master a new technology.

C) are those formed to enable the partners to be consistent first movers or fast followers.

D) are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit.

E) aim at insulating the partners against the impacts of the five competitive forces and industry driving forces.

4 Mergers and acquisitions are a much used strategy because they are an effective means of

A) revamping a company’s value chain.

B) facilitating the employment of both offensive and defensive strategies.

C) creating a more cost-efficient operation, expanding a company’s geographic coverage, and extending a company’s business into new product categories.

D) gaining quick access to new technologies or other resources and competitive capabilities and trying to invent a new industry and lead the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities.

E) gaining quick access to new technologies or other resources and competitive capabilities and; plus creating a more cost-efficient operation, expanding a company’s geographic coverage, and extending a company’s business into new product categories.

5 Which one of the following statements about merger and acquisition strategies is true?

A) Merger and acquisition strategies are nearly always a superior strategic alternative to forming alliances or partnerships with these same companies.

B) Merger and acquisition strategies tend to be far more successful that forming strategic alliances and cooperative partnerships with other companies.

C) Despite many successes, mergers and acquisitions do not always produce the hoped-for outcomes. Cost savings may prove smaller than expected. Gains in competitive capabilities may never materialize at all.

D) Mergers and acquisition strategies are a very high-risk strategy because of the financial drain of using the company’s cash resources to accomplish the merger or acquisition.

E) Merger and acquisition strategies are one of the best ways for helping a company strengthen its brand image.

6 Which of the following is typically the strategic impetus for forward vertical integration?

A) To charge lower retail prices and thereby attract a bigger, more loyal clientele of customers

B) To make it easier to expand the company’s product line

C) To gain better access to end users and better market visibility

D) To achieve greater control over advertising and in-store retail merchandising

E) To gain better access to greater economies of scale

7 Which of the following is not a strategic disadvantage of vertical integration?

A) It greatly reduces the opportunity for capturing maximum scale economies and achieving the lowest possible operating costs.

B) Vertical integration poses all kinds of capacity-matching problems.

C) It boosts a firm’s capital investment in the industry and thus increases business risk if the industry becomes unattractive later.

D) Vertical integration can result in less flexibility in accommodating shifting buyer preferences when a new product design doesn’t include parts and components that the company makes in-house.

E) Vertically integrated companies are often slow to embrace technological advances or more efficient production methods when they are saddled with older technology or facilities

8 Which of the following is not an advantage of outsourcing the performance of certain value chain activities to outsiders?

A) Being able to reduce distribution costs by eliminating the use of wholesale distributors and retail dealers and, instead, selling direct to end-users at the company’s Web site.

B) Allowing a company to concentrate on its core business, leverage its key resources, and do even better what it already does best

C) Improving the company’s ability to innovate by allying with “world-class” suppliers who have cutting edge intellectual capital and are first-to-market with next-generation parts and components

D) Being able to speedily and efficiently assemble diverse kinds of competitively valuable expertise

E) Obtaining higher quality and/or cheaper components or services

9 A blue ocean type of offensive strategy

A) is a pre-emptive strike type of price-cutting offensive used by a market leader to steal customers away from higher-priced rivals.

B) offers growth in revenues and profits by discovering or inventing new industry segments that create altogether new demand

C) involves deliberately attacking those market segments where a key rival makes big profits.

D) involves using innovative advertising and deep price discounts to grab sales and market share from complacent or distracted rivals.

E) employs highly creative, never-used-before strategic moves to attack the competitive weaknesses of rivals.

10 In which of the following situations is being first to initiate a particular move not likely to result in a positive payoff?

A) When pioneering helps build up a firm’s image and reputation with buyers

B) When first-time buyers remain strongly loyal to a pioneering firm in making repeat purchases

C) When late movers can copy a successful pioneer’s moves quickly and at lower cost

D) When moving first can constitute a preemptive strike, making imitation extra hard or unlikely

E) When moving first can result in a cost advantage over rivals