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Essentials of Strategic Management, 4th Edition
Test Bank – John Gamble
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Chapter 01
1. Managers in all types of businesses must address the central strategic question:
3. The competitive moves and business approaches a company's management is using to grow the
business, compete successfully, attract and please customers, conduct operations, respond to
changing economic and market conditions, and achieve organizational objectives is referred to as
its
A. strategy.
B. mission statement.
C. strategic intent.
D. business model.
E. strategic vision.
1-1
4. A company's strategy is most accurately defined as
A. are the actions and moves in the marketplace that managers take to gain a sustainable
competitive advantage.
B. is figuring out how to maximize profits and shareholder value.
C. concerns how to improve the efficiency of its business model.
D. deals with how management plans to maximize profits while, at the same time, operating in a
socially responsible manner.
E. is figuring out how to become the industry's low-cost provider.
1-2
9. A creative, distinctive strategy that delivers a sustainable competitive advantage is important
because
11. A creative, distinctive strategy that sets a company apart from rivals and that gives it a
sustainable competitive advantage
12. Proven approaches to winning a sustainable competitive advantage include which of the
following?
1-3
13. Which of the following is a frequently used strategic approach to setting a company apart from
rivals and achieving a sustainable competitive advantage?
A. Striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive
advantage.
B. Outcompeting rivals on the basis of such differentiating features as higher quality, wider
product selection, added performance, better service, more attractive styling, or technological
superiority.
C. Developing competitively valuable resources and capabilities that rivals can't easily match,
copy, or trump with capabilities of their own.
D. Focusing on a narrow market niche and winning a competitive edge by doing a better job than
rivals of serving the special needs and tastes of buyers comprising the niche.
E. All of these.
14. Which of the following is not a frequently used strategic approach to setting a company apart from
rivals and achieving a sustainable competitive advantage?
15. Which of the following is not one of the basic reasons that a company's strategy evolves over
time?
A. An ongoing need to abandon those strategy features that are no longer working well
B. The proactive efforts of company managers to improve the company's financial performance
and secure a competitive advantage
C. The need on the part of company managers to make regular adjustments in the company's
business model
D. The need to respond to the actions and competitive moves of rival firms
E. The need to keep strategy in step with changing industry and competitive conditions
16. A company's strategy is a "work in progress" and evolves over time because of
A. the ongoing need of company managers to react and respond to changing industry and
competitive conditions.
B. the ongoing need to imitate the new strategic moves of the industry leaders.
C. the need to make regular adjustments in the company's strategic vision.
D. the importance of developing a fresh strategic plan every year.
E. the frequent need to modify key elements of the company's business model.
1-4
17. Changing circumstances and ongoing managerial efforts to improve the strategy
A. left unchanged from management's original planned set of actions and business approaches
since making on-the-spot changes is too risky.
B. a combination of defensive moves to protect the company's market share and offensive
initiatives to set the company's product offering apart from rivals.
C. like the strategies of other industry members since all companies are confronting much the
same market conditions and competitive pressures.
D. a blend of deliberate planned actions to improve the company's competitiveness and financial
performance and as-needed unplanned reactions to unanticipated developments and fresh
market conditions.
E. a mirror image of its business model, so as to avoid impairing company profitability.
1-5
21. Which of the following statements about a company's realized strategy is true?
A. A company's realized strategy is mostly hidden to outside view and is deliberately kept under
wraps by top-level managers.
B. A company's realized strategy is typically planned well in advance and usually deviates little
from the planned set of actions.
C. A company's realized strategy generally changes very little over time unless a newly appointed
CEO decides to take the company in a new direction with a new strategy.
D. A company's realized strategy is typically a blend of deliberate/planned initiatives and
emergent/unplanned reactive strategy elements.
E. A company's realized strategy is developed mostly on the fly because of the constant efforts of
managers to keep rival companies at a disadvantage.
A. deliberate/planned initiatives that have proven themselves in the marketplace and newly
launched initiatives aimed at further boosting performance.
B. emergent/reactive adjustments to unanticipated strategic moves by rivals, unexpected
changes in customer preferences, and new market opportunities.
C. tactical plans to imitate the key elements of the strategies employed by rivals.
D. Both deliberate/planned initiatives that have proven themselves in the marketplace and newly
launched initiatives aimed at further boosting performance and emergent/reactive adjustments
to unanticipated strategic moves by rivals, unexpected changes in customer preferences, and
new market opportunities.
E. All of these.
A. concerns the actions and business approaches that will be used to grow the business, conduct
operations, please customers, and compete successfully.
B. relates to the principle business components that will allow the business to generate revenues
ample to cover costs and produce a profit.
C. concerns what moves in the marketplace it plans to make to outcompete rivals.
D. deals with how it can simultaneously maximize profits and operate in a socially responsible
manner.
E. concerns how management plans to pursue strategic objectives, given the larger imperative of
meeting or beating its financial performance targets.
1-6
25. A viable business model includes a valuable customer value proposition that
A. details the manner in which the company will pass the three tests of a winning strategy .
B. indicates how the strategy will result in achieving the targeted strategic objectives.
C. clarifies (1) how the business will provide customers with value, and (2) why the business will
generate revenues sufficient to cover costs and produce attractive profits.
D. explains how it intends to achieve high profit margins.
E. sets forth the actions and approaches that it will employ to achieve market leadership.
28. A well-conceived strategy is value creating producing excellence in company performance and is
best when the gains are achieved.
A. initiate new initiatives even though they don't seem to match the company's internal and
external situation.
B. scrutinize the company's existing strategies compatibility with desired outcomes on a regular
basis.
C. evaluate the firm's business model at least every three years.
D. ensure core capabilities are incorporated for establishing a competitive advantage.
E. align existing strategies with new strategies to emphasize incremental gains.
1-7
30. Which of the following questions ought to be used to distinguish a winning strategy from a so-so
or flawed strategy?
a. Strategy
b. Sustainable competitive advantage
c. Business model
1-8
33. Explain the difference between a company's business model and a company's strategy.
34. What is the connection between a company's strategy and its quest for sustainable competitive
advantage?
35. Should a company's strategy be tightly connected to its quest for competitive advantage? Why or
why not? What difference does it makes whether a company has a sustainable competitive
advantage or not?
1-9
37. Why is a company's strategy partly proactive and partly reactive?
39. Define and explain the importance of the two elements of a company's business model.
40. What are the three criteria for determining whether a company has a winning strategy?
1-10
41. Why is sustainable competitive advantage so important to a winning business strategy?
1-11
Chapter 01 Strategy, Business Models, and Competitive Advantage
Answer Key
1. Managers in all types of businesses must address the central strategic question:
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 01-01 Understand why every company needs a distinctive strategy to compete successfully; manage its
business operations; and strengthen its prospects for long-term success.
Topic: What Do We Mean by Strategy?
1-12
3. The competitive moves and business approaches a company's management is using to grow
the business, compete successfully, attract and please customers, conduct operations,
respond to changing economic and market conditions, and achieve organizational objectives
is referred to as its
A. strategy.
B. mission statement.
C. strategic intent.
D. business model.
E. strategic vision.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 01-01 Understand why every company needs a distinctive strategy to compete successfully; manage its
business operations; and strengthen its prospects for long-term success.
Topic: What Do We Mean by Strategy?
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 01-01 Understand why every company needs a distinctive strategy to compete successfully; manage its
business operations; and strengthen its prospects for long-term success.
Topic: What Do We Mean by Strategy?
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 01-01 Understand why every company needs a distinctive strategy to compete successfully; manage its
business operations; and strengthen its prospects for long-term success.
Topic: What Do We Mean by Strategy?
1-13
6. Which of the following is not an element of a company's business strategy?
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 01-01 Understand why every company needs a distinctive strategy to compete successfully; manage its
business operations; and strengthen its prospects for long-term success.
Topic: What Do We Mean by Strategy?
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 01-01 Understand why every company needs a distinctive strategy to compete successfully; manage its
business operations; and strengthen its prospects for long-term success.
Topic: What Do We Mean by Strategy?
A. are the actions and moves in the marketplace that managers take to gain a sustainable
competitive advantage.
B. is figuring out how to maximize profits and shareholder value.
C. concerns how to improve the efficiency of its business model.
D. deals with how management plans to maximize profits while, at the same time, operating in
a socially responsible manner.
E. is figuring out how to become the industry's low-cost provider.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 01-02 Learn why it is important for a company to have a viable business model that outlines the company's
customer value proposition and its profit formula.
Topic: Strategy and the Quest for Competitive Advantage
1-14
9. A creative, distinctive strategy that delivers a sustainable competitive advantage is important
because
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 01-02 Learn why it is important for a company to have a viable business model that outlines the company's
customer value proposition and its profit formula.
Topic: Strategy and the Quest for Competitive Advantage
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 01-02 Learn why it is important for a company to have a viable business model that outlines the company's
customer value proposition and its profit formula.
Topic: Strategy and the Quest for Competitive Advantage
11. A creative, distinctive strategy that sets a company apart from rivals and that gives it a
sustainable competitive advantage
1-15
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Samuli alkoi syödä, ja Serafiina toi lautasella hänelle maistaa
herrasruokaa, jota oli voissa paistettu.
Vainion perällä oli Antin mökki, metsän laidassa. Antilla oli peltoa
parin tynnyrin maa pirttinsä ympärillä, navetta ja kaksi lehmää.
Takasuolla oli sitäpaitsi torppaan kuuluva niittykin, ja polttopuuta sai
ottaa talon metsäsarasta. Antin torppa olikin paras etujensa puolesta
koko kylässä, ja torpankirjat kuuluivat olevan lujat ja pätevät.
Antti oli hyvin toimeentuleva mies. Ei ollut kuin kaksi lasta, tyttö ja
poika, ja täysiä ihmisiä molemmat jo.
Kotona oli Antti, ja torpassa vallitsi hyvä mieliala. Aukusti poika oli
eilen palannut lauttahommista, mihin tukinlaskun aikana keväällä oli
lähtenyt. Nyt viime työkseen oli kuljettanut lauttoja meren suulle ja
eilen illalla oli kotiutunut ja parhaiksi ehtinyt kylpemään.
»Ja rahaa kuin roskaa vielä», sanoi Kaisa, kun Samuli ihmetteli
Aukustin pukeutuessa uusiin vaatteisiinsa.
»On se mies liikkeellä ollut», kiitteli Samuli. »Vaan siinä se on, että
kun ei juo eikä pieksä korttia, niin rahaa karttuu.»
Monasti oli tuo tapaus mieleen johtunut ja silloin oli aina tullut
ajatelleeksi, että Jumalan sormi pidätti… niinkuin oli pidättänyt
jälkeenpäinkin monesta pahasta työstä, jotka ajatuksissa olivat
syntyneet…
»Täälläpä iso asia on, kun huuto kuuluu virstan päähän», sanoi
Samuli sisään tullessaan.
»Eihän tuota nyt vielä niin varmaan tiedä uskoa… Eipähän ole
Törmälä itse koskaan siitä sanallakaan maininnut», sanoi hän vihdoin
sepän ja Liisan puheisiin.
4.
Ja Samuli oli itsekseen päättänyt, että nyt kun tulee, niin ottaa hän
puheeksi… Ensiksi kansakouluasian, josta jo ympäri kylää puhuttiin,
ja jos se kuitenkin alkaa olla tosi, rupeaa tuumailemaan uudesta
mökin paikasta. Täällä Takasuon rannalla, Vasuharjun kupeella, olisi
monessakin paikassa hyvää peltomaata. Vanhan miehen
asumapaikaksi olisikin oikein sopiva…
Hiki tippui hänen pitkästä mustasta tukastaan, mutta laihat kasvot
olivat kovin kalpeat. Kun laiha selkä kumartuessa koukistui, pistivät
selkärangan luusolmut ohkaisen paidan läpi näkyviin. Hoikat olivat
kätten ranteet, ja käsivarret lihaksettomat kuin karsitut seipäät.
Mutta silti nousi kiinteä, vettä itkevä savi suurina lapiopaloina ojan
molemmille puolin kookkaiksi röykkiöiksi.
Törmälä hymähti:
»Ei tästä vielä pitäisi tosi sadetta tulla, sillä minua ei ole
painostanut tänään, niinkuin sateen edellä painostaa», virkkoi siihen
Samuli.
Törmälä hymähti.
»Kyllä tämä oja tällä viikolla valmistuu», sanoi Samuli, kun läksivät
astumaan kylään päin, Vasuharjua kohti.
Hän oli nyt niin hyvällä tuulella, että kaikki asiat tuntuivat olevan
hyvin päin. Lisäksi johtui mieleen, että kukaties sieltä vielä Paavo-
Eemelikin tulee niin ettei kukaan arvaakaan, ja mikä tietää mitä on
matkassa… Pian navetta nousee ja vaikka mitä muutakin…
»Ihmiset puhuvat…»
5.
Kim Samuli kolmannen päivän iltana palasi Takasuolta, oli vielä
valoisa. Hän oli tänään tullut varemmin saadakseen kuokkansa
teroitetuksi sepän pajassa. Seppä olikin vielä takomassa, kun Samuli
astui pajaan.
Kuolema!
Jos vaan emäntä nytkin elänyt olisi, niin kohta olisi vienyt hänetkin
isännän vuoteen viereen…
Ja Samulille muistui mieleen ensi ilta, kun tähän taloon jäi. Isäntä
ja hän nousivat rannasta pihaan ja tulivat sisälle. Kesäilta oli, heinää
oli jo ruvettu tekemään.
Kuinka käy silloin hänen torpalleen, kun ei ole tullut niitä kirjoja
tehdyksi?
Hänelle tuli siinä niin paha olla, ettei saattanut enää istuakaan,
kun lisäksi muisti sen kansakoulurakennushomman… Serafiinahan oli
ollut sillä kansakouluntarkastajalla kumppanina, kun Varpusmäessä
kävivät.
Hän toivoi, että Liisa jo olisi ehtinyt nukkua eikä rupeaisi mitään
tiedustelemaan… isännän sairaudesta ja niistä torpankirjoista… Ei
tiennyt enää mitä vastata… kun yhdessä sepän kanssa aivan
myötäänsä niistä puhuivat… Itse hän ei oivaltanut niin tärkeiksi koko
kirjoja… Hän oli ymmärtänyt Törmälän puheista, että tällä oli
paremmat kirjat Samulia varten varattuina…
»Olen minä sinun puoltasi muutenkin pitänyt… jonka kerran
nähnet, jos elänet», oli sanonut.
Silloin alkoi Liisa taas vaivata niillä torpankirjoilla. Ja kun kuuli, että
Serafiina oli estellyt isännän luo menemästä, niin melkein huutaen
sanoi:
»Siinä oli nyt joku muu syy Serafiinalla, jonka vuoksi ei tahtonut
sinua päästää.»
6.
»Jos nyt niin on, että talo on Serafiinan, kuten kuuluvat puhuvan,
niin kuinka käy, jos Serafiina alkaa isännöidä? Ei häneen ole
luottamista, ei ole isäänsä tytär…»