Questions and Answers about Competitive Pressures and Strategic Management

What are some typical sources of competitive pressures?

Question:

1. Which of the following is a typical source of competitive pressures?
A. Potential changes in a company's senior leadership and strategy
B. The stock prices of competitor companies
C. The threat of new entrants into the market
D. The power and influence of industry driving forces

2. The two most important parts of SWOT analysis are
A. pinpointing the company's competitive assets and pinpointing its competitive liabilities.
B. drawing conclusions from the SWOT listings about the company's overall situation and translating these conclusions into
strategic actions to better match the company's strategy to its resource strengths and market opportunities, correct the important
weaknesses, and defend against external threats.
C. identifying the company's resource strengths and identifying the company's best market opportunities.
D. identifying the external threats to a company's future profitability and pinpointing how many market opportunities it has.

3. The lower the user's switching costs, the
A. more intense the competitive pressures posed by substitute products.
B. greater the bargaining power from both suppliers and influential customers.
C. harder it is for the sellers of attractive substitutes to lure buyers to their offering.
D. less intense the competitive pressures posed by substitute products.

4. Which of the following is one of the main tasks of identifying strategic issues and problems that merit
front-burner managerial attention?
A. Focusing on the company's internal management strengths and creating opportunities for advancement
B. Maintaining adherence to the original strategic plan and vision

C. Assessing what challenges the company has to overcome to be financially and competitively successful in the years ahead
D. Evaluating the company's own resources and competitive position

5. A company's value chain helps create competitive advantage by
A. ensuring company products and services remain relatively constant.
B. by diversifying distribution channels to increase product availability.
C. driving down costs through lean management principles.
D. contributing to increased efficiency and lower costs than competitors.

6. Key financial ratios that help to indicate how well a company's strategy is working don't include
A. market share.
B. working capital.
C. return on stockholders equity.

D. gross profit margin.
7. Having good competitive intelligence about rivals' strategies, latest actions and announcements, resource
strengths and weaknesses, and moves to improve their situation is important because it
A. enables more accurate predictions about how long it will take a particular rival to copy most of what the strategy leader is
doing.
B. identifies who the industry's current market-share leaders are.
C. enables company managers to determine which rival has the worst strategy and avoid making the same strategy mistakes.
D. helps a company to craft its own strategic moves with some confidence about what market maneuvers to expect from its
rivals.

8. In analyzing a company's competitive assets, which of the following questions is most important to ask?
A. Does the company have the industry's most efficient and effective value chain?
B. Are the company's key success factors more dominant than the key success factors of close rivals?
C. What are the company's resources and capabilities, and which are the most competitive?
D. Is the company's present strategy better than the strategies of its closest rivals based on such performance measures as
earnings per share, ROE, dividend payout ratio, and average annual increase in the common stock price?

9. Which of the following factors represents the strategically relevant political factors in the macroenvironment that will influence the performance of all firms across the board?
A. the strength of the federal banking system
B. the exogenous forces related to the general environmental demand
C. social factors that could fuel a political agenda and create greater transparency
D. bailouts and energy policies that are industry-specific

10. Which of the following statements is true of SWOT analysis?
A. It reveals whether a company is competitively stronger than its closest rivals.
B. It's a tool for benchmarking whether a firm's strategy is closely matched to industry key success factors.
C. It's a way to measure whether a company's value chain is longer or shorter than the value chains of key rivals.
D. It provides a good overview of whether a company's situation is fundamentally healthy or unhealthy.

11. Activity-based cost accounting is used to
A. determine the costs of each strategic action a company initiates.
B. benchmark the costs of primary value-chain activities against the costs of the support value chain activities.
C. determine the costs of each primary and support activity in a company's value chain to reveal the nature of its internal cost
structure.
D. determine whether the value chains of rival companies are similar or different.

12. Which of the following statements is true of activity-based costing?
A. It's a powerful tool for identifying the different pieces of a company's value chain and classifying them as primary or support
activities.
B. It involves determining which value-chain activities represent variable costs and which represent fixed costs.
C. It uses benchmarking techniques to develop cost estimates for the value-chain activities of each major rival.
D. It's an accounting system that assigns expenses to whichever activity in a company's value chain is responsible for creating the
cost.

13. A company requires a dynamically evolving portfolio of resources and capabilities to
A. retain the benefits of high market share as an interest in growth strategies.
B. maintain its competitiveness and help drive improvements in its performance.
C. sustain complex manufacturing systems as a strategic recoil.
D. assist the strategic planning team in overall direction.

14. How strong the competitive pressures from substitute products are depends on whether the
A. available substitutes are strongly or weakly differentiated and whether buyers make purchases frequently or infrequently.
B. attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes.
C. producers of substitutes have ample budgets for new product research and development (R&D).
D. available substitutes are products or services.

15. The competitive position of industry suppliers is weakened when
A. there are no sufficient substitutes for supplier products.
B. the items purchased from suppliers are in short supply.
C. the cost of switching from one supplier to another is low.
D. suppliers' products are differentiated.

16. The nature and strength of the strongest competitive force that prevails in an industry is generally a
product of
A. the pressures induced by the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the
industry.
B. the pressures of environmental requirements in different competing geographies.
C. regulatory requirements intensified by changing governing bodies.
D. the unknown competitor business expansion strategies that impact industry production and outlook.

17. Which of the following is a component of evaluating a company's resources and competitive assets?
A. Scanning the environment to determine a company's best and most profitable customers
B. Deciding which resources are tangible and which are intangible and considering cross-functional capabilities
C. Assessing barriers to entry in new markets based on regulatory requirements
D. Assessing whether the company's costs and prices are competitive based on geographical inputs