[TEST BANK] STRATEGIC MANAGEMENT,, TEXT AND
CASES 9TH EDITION BY DESS, MCNAMARA, EISNER.
Strategy - (ANSWER)A company's action plan for outperforming its competitors and achieving
superior profitability
What strategy is about - (ANSWER)Competing differently from rivals -doing what competitors
don't do, or, even better, doing what they can't do
What every strategy needs - (ANSWER)Every strategy needs a distinctive element that attracts
customers and produces a competitive edge
When a strategy stands a chance of succeeding - (ANSWER)A strategy only stands a chance of
succeeding when it is predicted on actions, business approaches, and competitive moves aimed at
appealing to buyers in ways that set a company apart from rivals
Characteristics of routes to competitive advantage - (ANSWER)There are many routes to
competitive advantage, but they all involve either giving buyers what they perceive as superior
value compared to the offerings of rival sellers or giving buyers the same value as others at a
lower cost to the firm
Competitive Advantage - (ANSWER)A company achieves a competitive advantage when it
provides buyers with superior value compared to rival sellers or offers the same value at a lower
cost to the firm
Sustainable Competitive Advantage - (ANSWER)An advantage is sustainable if it persists
despite the best efforts of competitors to match or surpass this advantage
Delivering superior value or delivering value more efficiently - (ANSWER)Nearly always
requires performing value chain activities differently than rivals and building competencies and
resource capabilities that are not readily matched
,Distinctiveness - (ANSWER)If a strategy is not distinctive, then there can be no competitive
advantage, since no firm would be meeting customer needs better or operating more efficiently
than any other
What makes a competitive advantage sustainable - (ANSWER)Elements of the strategy that give
buyers lasting reasons to prefer a company's products or services over those of competitors -
reasons that competitors are unable to nullify or overcome despite their best efforts
Four most frequently used and dependable strategic and dependable approaches - (ANSWER)1.
Striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive
advantage over rivals
2. Outcompeting rivals on the basis of differentiating features, such as higher quality, wider
product selection, added performance, value-added services, more attractive styling, and
technological superiority
3. Developing an advantage based on offering more value for the money (best-cost provider
strategy)
4. Focusing on a narrow market niche within an industry
Strategy is a work in progress - (ANSWER)Changing circumstances and ongoing management
efforts to improve the strategy cause a company's strategy to evolve over time -a condition that
makes the task of crafting strategy a work in progress, not a one-time event
How strategy is shaped - (ANSWER)A company's strategy is shaped partly by management
analysis and choice and partly by the necessity of adapting and learning by doing
Managers must be willing to modify strategy - (ANSWER)Managers of every company must be
willing and ready to modify the strategy in response to changing market conditions, advancing
technology, unexpected moves by competitors, shifting buyer needs, emerging market
opportunities, and mounting evidence that the strategy is not working well
Industry environments characterized by high-velocity change - (ANSWER)Require companies to
repeatedly adapt their strategies
,Evolving strategy - (ANSWER)Adapting to new conditions and constantly evaluating what is
working well enough to continue and what needs to be improved are normal parts of the strategy-
making process, resulting in an evolving strategy
A typical strategy is a blend of: - (ANSWER)1. Proactive: planned initiatives to improve the
company's financial performance and secure a competitive edge
2. Reactive: responses to unanticipated developments and fresh market conditions
Deliberate Strategy - (ANSWER)Consists of proactive strategy elements that are both planned
and realized as planned
Emergent Strategy - (ANSWER)Consists of reactive strategy elements that emerge as changing
conditions warrant
Realized Strategy (Strategy In Toto) - (ANSWER)Tends to be a combination of proactive and
reactive elements, with certain strategy elements being abandoned because they have become
obsolete or ineffective
Business Model - (ANSWER)sets forth the logic for how its strategy will create value for
customers, while at the same time generate revenues sufficient to cover costs and realize a profit
The two elements of a company's business model - (ANSWER)1. Its customer value proposition
2. Its profit formula
Customer value proposition - (ANSWER)Lays out the company's approach to satisfying buyers
wants and needs at a price customers will consider a good value. Customers want the best value
for the cost (C), (Value-Price).
Profit formula - (ANSWER)The profit formula describes the company's approach to determining
a cost structure that will allow for acceptable profit, given the pricing tied to its customer value
proposition. The profit formula reveals how efficiently a company can meet customer wants and
needs and deliver on the value proposition
, The Fit Test - (ANSWER)How well does the strategy fit the company's situation?
External Fit - (ANSWER)A strategy has to be well matched to industry and competitive
conditions, a company's best market opportunities, and other pertinent aspects of the business
environment in which the company operates
Internal Fit - (ANSWER)A strategy must be tailored to the company's resources and competitive
capabilities and be supported by a complementary set of functional activities
Dynamic Fit - (ANSWER)Winning strategies also exhibit dynamic fit in the sense that they
evolve over time in a manner that maintains close and effective alignment with the company's
situation even as internal conditions change
Competitive Advantage Test - (ANSWER)Can the strategy help the company achieve a
sustainable competitive advantage?
The Performance Test - (ANSWER)Is the strategy producing good company performance?
Two kinds of performance indicators tell the most about the caliber of a competitive strategy: -
(ANSWER)1. Competitive strength and market standing
2. Profitability and financial strength
Good Management = - (ANSWER)Good Strategy + Good Strategy Execution
A Winning Strategy must pass three tests: - (ANSWER)1. The Fit Test
2. The Competitive Advantage Test
3. The Performance Test
Most telling signs of good management - (ANSWER)Good strategy and good strategy execution
CASES 9TH EDITION BY DESS, MCNAMARA, EISNER.
Strategy - (ANSWER)A company's action plan for outperforming its competitors and achieving
superior profitability
What strategy is about - (ANSWER)Competing differently from rivals -doing what competitors
don't do, or, even better, doing what they can't do
What every strategy needs - (ANSWER)Every strategy needs a distinctive element that attracts
customers and produces a competitive edge
When a strategy stands a chance of succeeding - (ANSWER)A strategy only stands a chance of
succeeding when it is predicted on actions, business approaches, and competitive moves aimed at
appealing to buyers in ways that set a company apart from rivals
Characteristics of routes to competitive advantage - (ANSWER)There are many routes to
competitive advantage, but they all involve either giving buyers what they perceive as superior
value compared to the offerings of rival sellers or giving buyers the same value as others at a
lower cost to the firm
Competitive Advantage - (ANSWER)A company achieves a competitive advantage when it
provides buyers with superior value compared to rival sellers or offers the same value at a lower
cost to the firm
Sustainable Competitive Advantage - (ANSWER)An advantage is sustainable if it persists
despite the best efforts of competitors to match or surpass this advantage
Delivering superior value or delivering value more efficiently - (ANSWER)Nearly always
requires performing value chain activities differently than rivals and building competencies and
resource capabilities that are not readily matched
,Distinctiveness - (ANSWER)If a strategy is not distinctive, then there can be no competitive
advantage, since no firm would be meeting customer needs better or operating more efficiently
than any other
What makes a competitive advantage sustainable - (ANSWER)Elements of the strategy that give
buyers lasting reasons to prefer a company's products or services over those of competitors -
reasons that competitors are unable to nullify or overcome despite their best efforts
Four most frequently used and dependable strategic and dependable approaches - (ANSWER)1.
Striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive
advantage over rivals
2. Outcompeting rivals on the basis of differentiating features, such as higher quality, wider
product selection, added performance, value-added services, more attractive styling, and
technological superiority
3. Developing an advantage based on offering more value for the money (best-cost provider
strategy)
4. Focusing on a narrow market niche within an industry
Strategy is a work in progress - (ANSWER)Changing circumstances and ongoing management
efforts to improve the strategy cause a company's strategy to evolve over time -a condition that
makes the task of crafting strategy a work in progress, not a one-time event
How strategy is shaped - (ANSWER)A company's strategy is shaped partly by management
analysis and choice and partly by the necessity of adapting and learning by doing
Managers must be willing to modify strategy - (ANSWER)Managers of every company must be
willing and ready to modify the strategy in response to changing market conditions, advancing
technology, unexpected moves by competitors, shifting buyer needs, emerging market
opportunities, and mounting evidence that the strategy is not working well
Industry environments characterized by high-velocity change - (ANSWER)Require companies to
repeatedly adapt their strategies
,Evolving strategy - (ANSWER)Adapting to new conditions and constantly evaluating what is
working well enough to continue and what needs to be improved are normal parts of the strategy-
making process, resulting in an evolving strategy
A typical strategy is a blend of: - (ANSWER)1. Proactive: planned initiatives to improve the
company's financial performance and secure a competitive edge
2. Reactive: responses to unanticipated developments and fresh market conditions
Deliberate Strategy - (ANSWER)Consists of proactive strategy elements that are both planned
and realized as planned
Emergent Strategy - (ANSWER)Consists of reactive strategy elements that emerge as changing
conditions warrant
Realized Strategy (Strategy In Toto) - (ANSWER)Tends to be a combination of proactive and
reactive elements, with certain strategy elements being abandoned because they have become
obsolete or ineffective
Business Model - (ANSWER)sets forth the logic for how its strategy will create value for
customers, while at the same time generate revenues sufficient to cover costs and realize a profit
The two elements of a company's business model - (ANSWER)1. Its customer value proposition
2. Its profit formula
Customer value proposition - (ANSWER)Lays out the company's approach to satisfying buyers
wants and needs at a price customers will consider a good value. Customers want the best value
for the cost (C), (Value-Price).
Profit formula - (ANSWER)The profit formula describes the company's approach to determining
a cost structure that will allow for acceptable profit, given the pricing tied to its customer value
proposition. The profit formula reveals how efficiently a company can meet customer wants and
needs and deliver on the value proposition
, The Fit Test - (ANSWER)How well does the strategy fit the company's situation?
External Fit - (ANSWER)A strategy has to be well matched to industry and competitive
conditions, a company's best market opportunities, and other pertinent aspects of the business
environment in which the company operates
Internal Fit - (ANSWER)A strategy must be tailored to the company's resources and competitive
capabilities and be supported by a complementary set of functional activities
Dynamic Fit - (ANSWER)Winning strategies also exhibit dynamic fit in the sense that they
evolve over time in a manner that maintains close and effective alignment with the company's
situation even as internal conditions change
Competitive Advantage Test - (ANSWER)Can the strategy help the company achieve a
sustainable competitive advantage?
The Performance Test - (ANSWER)Is the strategy producing good company performance?
Two kinds of performance indicators tell the most about the caliber of a competitive strategy: -
(ANSWER)1. Competitive strength and market standing
2. Profitability and financial strength
Good Management = - (ANSWER)Good Strategy + Good Strategy Execution
A Winning Strategy must pass three tests: - (ANSWER)1. The Fit Test
2. The Competitive Advantage Test
3. The Performance Test
Most telling signs of good management - (ANSWER)Good strategy and good strategy execution
