Bamford & West
Chapter 1 - The Need for Strategy
TRUE/FALSE
1. Sirius XM Satellite Radio faces competition from iPods and other MP3 players that did not
exist at the time each individual company conceived of a satellite radio service.
ANS: T PTS: 1 DIF: Medium REF: p. 5
OBJ: 1 NAT: AACSB Reflective Thinking | AACSB Strategy
2. The two strategic imperatives for organizations in today’s economic environment include
opportunity recognition and value creation.
ANS: T PTS: 1 DIF: Easy REF: p. 7
OBJ: 1 NAT: AACSB Analytic | AACSB Strategy
3. Before the 1970s companies operated in markets that were unstable, rapidly changing, and
hypercompetitive.
ANS: F PTS: 1 DIF: Easy REF: p. 6
OBJ: 1 NAT: AACSB Reflective Thinking | AACSB Strategy
4. The critical need in business to identify and exploit where the market is heading is known
as value creation.
ANS: F PTS: 1 DIF: Easy REF: p. 7
OBJ: 1 NAT: AACSB Analytic | AACSB Strategy
,5. The value created by a firm is distributed among a number of stakeholders.
ANS: T PTS: 1 DIF: Medium REF: P. 7
OBJ: 1 NAT: AACSB Reflective Thinking | AACSB Strategy
6. Analysis, formulation, implementation, and synthesis are the four stages typical of the
strategic management process.
ANS: F PTS: 1 DIF: Medium REF: p. 9
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy
7. Strategy is the overall concept for how a company organizes itself and its activities to
conduct business successfully, deliver superior returns to shareholders, and outperform
rivals.
ANS: T PTS: 1 DIF: Easy REF: p. 9
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy
8. A sound strategy is easily recognized because it is geared toward a mission of making as
much money as possible.
ANS: F PTS: 1 DIF: Hard REF: pp. 11-12
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy
9. The Blockbuster example shows that a company can reverse an eroding market position by
matching the competitive moves of rivals that are using alternative strategies.
ANS: F PTS: 1 DIF: Medium REF: p. 13
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy, Value Creation
,10. The value chain offers a systematic way of examining all the activities of a firm and how
they interact to find a basis for a competitive advantage.
ANS: T PTS: 1 DIF: Easy REF: p. 13
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy
11. The role of strategy is to integrate a long-term vision for the company, the market and
competitive conditions encountered, and the company’s current situation and capabilities.
ANS: T PTS: 1 DIF: Medium REF: p. 14
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy
12. The vignette about Competition in Commercial Aircraft Manufacturing shows how strategic
decisions can have long-lasting effects.
ANS: T PTS: 1 DIF: Medium REF: p. 14
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy
13. Strategic decisions are different from other types of decisions because they are easily made
using past history and experience; strategic decisions become routinized after a period of
time.
ANS: F PTS: 1 DIF: Easy REF: p. 15
OBJ: 2 NAT: AACSB Analytic | AACSB Strategy
14. Strategic decisions typically involve the commitment of significant resources and are not
easily reversed.
ANS: T PTS: 1 DIF: Easy REF: p. 16
OBJ: 2 NAT: AACSB Analytic | AACSB Strategy
, 15. Corporate strategy is concerned with acquiring, managing, and divesting business units to
create a portfolio of businesses that earns economic returns above those that the individual
businesses could earn on their own.
ANS: T PTS: 1 DIF: Easy REF: p. 17
OBJ: 2 NAT: AACSB Analytic | AACSB Strategy
16. Metrics comprise only qualitative measures by which a firm can evaluate the effectiveness
of its business strategy.
ANS: F PTS: 1 DIF: Easy REF: p. 17
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy
17. Writing 2,500 years ago, Sun Tzu, in The Art of War, codified many of the precepts of
strategy that remain important even today.
ANS: T PTS: 1 DIF: Easy REF: p. 19
OBJ: 3 NAT: AACSB Reflective Thinking | AACSB Strategy
18. Frederick Taylor, a proponent of time and motion studies and “the science of work” in the
early 1900s, shifted the strategic focus of companies from practices designed to eliminate
rivals to an internal search for efficiencies and, thus, a competitive advantage based on the
firm’s own capabilities.
ANS: T PTS: 1 DIF: Hard REF: p. 19
OBJ: 3 NAT: AACSB Reflective Thinking | AACSB Strategy
19. Professor Michael Porter moved the study of strategy toward an emphasis on long-range
planning, in which the past is extrapolated into the future.
ANS: F PTS: 1 DIF: Medium REF: pp. 22-23
Chapter 1 - The Need for Strategy
TRUE/FALSE
1. Sirius XM Satellite Radio faces competition from iPods and other MP3 players that did not
exist at the time each individual company conceived of a satellite radio service.
ANS: T PTS: 1 DIF: Medium REF: p. 5
OBJ: 1 NAT: AACSB Reflective Thinking | AACSB Strategy
2. The two strategic imperatives for organizations in today’s economic environment include
opportunity recognition and value creation.
ANS: T PTS: 1 DIF: Easy REF: p. 7
OBJ: 1 NAT: AACSB Analytic | AACSB Strategy
3. Before the 1970s companies operated in markets that were unstable, rapidly changing, and
hypercompetitive.
ANS: F PTS: 1 DIF: Easy REF: p. 6
OBJ: 1 NAT: AACSB Reflective Thinking | AACSB Strategy
4. The critical need in business to identify and exploit where the market is heading is known
as value creation.
ANS: F PTS: 1 DIF: Easy REF: p. 7
OBJ: 1 NAT: AACSB Analytic | AACSB Strategy
,5. The value created by a firm is distributed among a number of stakeholders.
ANS: T PTS: 1 DIF: Medium REF: P. 7
OBJ: 1 NAT: AACSB Reflective Thinking | AACSB Strategy
6. Analysis, formulation, implementation, and synthesis are the four stages typical of the
strategic management process.
ANS: F PTS: 1 DIF: Medium REF: p. 9
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy
7. Strategy is the overall concept for how a company organizes itself and its activities to
conduct business successfully, deliver superior returns to shareholders, and outperform
rivals.
ANS: T PTS: 1 DIF: Easy REF: p. 9
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy
8. A sound strategy is easily recognized because it is geared toward a mission of making as
much money as possible.
ANS: F PTS: 1 DIF: Hard REF: pp. 11-12
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy
9. The Blockbuster example shows that a company can reverse an eroding market position by
matching the competitive moves of rivals that are using alternative strategies.
ANS: F PTS: 1 DIF: Medium REF: p. 13
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy, Value Creation
,10. The value chain offers a systematic way of examining all the activities of a firm and how
they interact to find a basis for a competitive advantage.
ANS: T PTS: 1 DIF: Easy REF: p. 13
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy
11. The role of strategy is to integrate a long-term vision for the company, the market and
competitive conditions encountered, and the company’s current situation and capabilities.
ANS: T PTS: 1 DIF: Medium REF: p. 14
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy
12. The vignette about Competition in Commercial Aircraft Manufacturing shows how strategic
decisions can have long-lasting effects.
ANS: T PTS: 1 DIF: Medium REF: p. 14
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy
13. Strategic decisions are different from other types of decisions because they are easily made
using past history and experience; strategic decisions become routinized after a period of
time.
ANS: F PTS: 1 DIF: Easy REF: p. 15
OBJ: 2 NAT: AACSB Analytic | AACSB Strategy
14. Strategic decisions typically involve the commitment of significant resources and are not
easily reversed.
ANS: T PTS: 1 DIF: Easy REF: p. 16
OBJ: 2 NAT: AACSB Analytic | AACSB Strategy
, 15. Corporate strategy is concerned with acquiring, managing, and divesting business units to
create a portfolio of businesses that earns economic returns above those that the individual
businesses could earn on their own.
ANS: T PTS: 1 DIF: Easy REF: p. 17
OBJ: 2 NAT: AACSB Analytic | AACSB Strategy
16. Metrics comprise only qualitative measures by which a firm can evaluate the effectiveness
of its business strategy.
ANS: F PTS: 1 DIF: Easy REF: p. 17
OBJ: 2 NAT: AACSB Reflective Thinking | AACSB Strategy
17. Writing 2,500 years ago, Sun Tzu, in The Art of War, codified many of the precepts of
strategy that remain important even today.
ANS: T PTS: 1 DIF: Easy REF: p. 19
OBJ: 3 NAT: AACSB Reflective Thinking | AACSB Strategy
18. Frederick Taylor, a proponent of time and motion studies and “the science of work” in the
early 1900s, shifted the strategic focus of companies from practices designed to eliminate
rivals to an internal search for efficiencies and, thus, a competitive advantage based on the
firm’s own capabilities.
ANS: T PTS: 1 DIF: Hard REF: p. 19
OBJ: 3 NAT: AACSB Reflective Thinking | AACSB Strategy
19. Professor Michael Porter moved the study of strategy toward an emphasis on long-range
planning, in which the past is extrapolated into the future.
ANS: F PTS: 1 DIF: Medium REF: pp. 22-23
