Crafting & Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases 23th edition

37) D

 

A company's strategy is devised by a set of well-informed managers or a board. It is subject to change as per market conditions and includes both proactive and reactive measures. Some parts of the strategies being developed are always on the fly, owing to fluctuating external and internal conditions.

38) B

 

A company's strategy in totality (its realized strategy) tends to be a combination of proactive and reactive elements, with certain strategy elements being abandoned because they have become obsolete or ineffective. A company's realized strategy can be observed in the pattern of its actions over time.

39) A

 

A portion of a company's strategy is always developed on the fly, coming as a response to fresh strategic maneuvers on the part of rival firms, unexpected shifts in customer requirements, fast-changing technological developments, newly appearing market opportunities, a changing political or economic climate, or other unanticipated happenings in the surrounding environment.

40) E

 

Sharing a strategy and business model with rival companies is not a standard procedure, but the other four steps are usually implemented in one or another form while crafting a strategy.

41) A

 

A successful strategy is a powerful one that aims at sustained competitive advantage and changes along with the evolving market and consumer needs and expectations. Such strategies are a combination of proactive and reactive elements that provide a competitive edge.

42) A

 

The theater deliberately diversifies its offerings to gain more profits and strengthen its market position. It is not a result of changing internal and external environmental factors, whereas the other examples are a result of changes to market, changes in customer preferences, or changes in economic climate.

43) E

 

A microbrewer that invests in building community water wells during a drought best exemplifies an emergent strategy.

44) B

 

All three companies do not have reactive strategy elements that emerge as changing conditions warrant. They employ proactive strategies to explore new markets.

45) B

 

Capitalizing upon the new surprising opportunity by creating a sub brand that offered exclusive bath products for women was a reactive response to unanticipated developments and fresh market conditions.

46) E

 

Canceling the job cuts for the time being to solidify its market position is a reactive strategy to ensure that new operations and current productivity are not affected. This crisis intervention is not a permanent solution, but a reactive strategy to maintain current balance. The options involving hiring new talent and acquiring a firm are proactive strategies. The options involving canceling the idea and shifting the workforce are either nonviable nor high-risk reactive strategies.

47) B

 

At the core of every sound strategy is the company's business model. A business model is management's blueprint to provide a customer the best value deal along with keeping costs low enough to make profits.

48) A

 

All but one of the above companies pursue the same business model—selling the product at a low or break-even price and making up the margins on the need for consumers to make repeated purchases of proprietary replacements or accessories such as blades, printer cartridges, coffee pods, and platform-specific computer games. Dell laptops do not require replacements or accessories that are proprietary; indeed, many of its software packages, peripherals, printers, and external drives are made by third parties.

49) D

 

A business model is management's blueprint for delivering a valuable product or service to customers in a manner that will generate revenues sufficient to cover costs and yield an attractive profit.

50) E

 

The two elements of any company's business model are its customer value proposition and its profit formula. Square’s customer value proposition lays out the company's approach to satisfying buyer wants and needs at a price that customers—primarily small retail businesses and restaurants—will consider a good value. The profit formula describes the company's approach to determining a cost structure that will allow for acceptable profits, given the pricing tied to its customer value proposition.