Thompson

Thompson: Chapter 1 Test: What is
Strategy & Why is it Important Questions
& Answers


A vcompany's vbusiness vmodel v(?):



a) vconcerns vthe vactions vand vbusiness vapproaches vthat vwill vbe vused vto vcreate va vwinning vstrategy vand
vdeliver vvalue vto vshareholders



b) vconcerns vhow vmanagement vplans vto vmaximize vprofits vfor vshareholders vand valso vdeliver vthe vbest
vpossible vvalue vto vcustomers



c) vdeals vwith vhow vit vcan vsimultaneously vmaximize vprofits, voperate vin va vsocially vresponsible vmanner,
vand vkeep vits vprices vas vlow vas vpossible



d) vsets vforth vhow vits vstrategy vand vgenerating vapproaches vwill vcreate vvalue vfor vcustomers vwhile vat vthe
vsame vtime vgenerating vample vrevenues vto vcover vcosts vand vrealize va vprofit



e) vis vmanagement's vstoryline vfor vhow vit vwill vgenerate vrevenues vample vto vcover vcosts, vkeep vprices vas
vlow vas vpossible, vand vbecome vthe vindustry's vmarket vshare vleader v- vAnswer v- vd) vsets vforth vhow vits

vstrategy vand vgenerating vapproaches vwill vcreate vvalue vfor vcustomers vwhile vat vthe vsame vtime

vgenerating vample vrevenues vto vcover vcosts vand vrealize va vprofit



Good vStrategy vand vgood vstrategy vexecution v(?):



a) vare vreliable vindicators vthat va vcompany venjoys va vsustainable vcompetitive vadvantage

b) vare vthe vbest vpathways vto vmarket vleadership, vtotal vcustomer vsatisfaction, vsuperior vprofit vmargins,
vand vmaximization vof vshareholder vwealth



c) vare vthe vmost vtelling vand vtrustworthy vsigns vof vgood vmanagement

d) vare vsurefire vguarantees vfor vavoiding vperiods vof vweak vfinancial vperformance

e) vare vthe vtwo vbest vsigns vthat va vcompany vhas van vexcellent vbusiness vmodel v- vAnswer v- vc) vare vthe vmost
vtelling vand vtrustworthy vsigns vof vgood vmanagement



There vare vmany vroutes vto vcompetitive vadvantage, vbut vthey vall vinvolve v(?):

, a) vachieving vthe vlargest vmarket vshare vof vany vcompany vin vthe vindustry

b) vproviding va vdistinctive vbuyer vsegment vwith vwhat vsegment vmembers vperceive vas vsuperior vvalue
vcompared vto vthe vofferings vof vrival vsellers



c) vhaving vlower vproduction vcosts vthan vany vother vrival vcompany vin vthe vindustry

d) vselling vat va vprice vthat visn't vover vthan vthe vprices vcharged vby vother vrival vfirms v

e) vproviding vbuyers vwith va vvery vhigh-quality vproduct vat van vattractive vprice v- vAnswer v- vb) vproviding va
vdistinctive vbuyer vsegment vwith vwhat vsegment vmembers vperceive vas vsuperior vvalue vcompared vto vthe

vofferings vof vrival vsellers



Which vone vof vthe vfollowing vstatements vabout vwhether va vcompany's vstrategy vcan vbe vconsidered
vethical vis vtrue v(?):




a) vall vstrategic vactions vthat vare vlegally vpermissible vautomatically vqualify vas valso vbeing vethically
vpermissible



b) vgovernmental vauthorities vare vthe vfinal varbiter vof vwhether va vcompany's vstrategic vactions vare
v"morally vright" vor v"morally vwrong"



c) va vcompany's vstrategy vqualifies vas v"ethical" vwhen vall vof vits vstrategic vactions vare vpleasing vto
vcustomers vand vdo vnot vharm vthe vfinancial vperformance vof vrival vfirms



d) vjust vkeeping va vcompany's vstrategic vactions vwithin vthe vbound vof vwhat vis vlegal vdoes vnot vmean vthat vall
vof vits vstrategic vactions vare valso vethical



e) vthe vmost vreliable vway vfor va vcompany vto vprotect vitself vfrom vcharges vthat vits vstrategy vhas vunethical
velements vis vto vobtain vstatements vfrom vat vleast vtwo vhighly vrespected vreligious vauthorities vcertifying

vthat vthey vhave vclosely vstudied vthe vcompany's vstrategy vand vdeeme v- vAnswer v- vd) vjust vkeeping va

vcompany's vstrategic vactions vwithin vthe vbound vof vwhat vis vlegal vdoes vnot vmean vthat vall vof vits vstrategic

vactions vare valso vethical



A vwinning vstrategy vis vone vthat v(?):



a) vis vcost vefficient, vis vethical, vand vmaximizes vshareholder vwealth

b) vresults vin va vcompany vbecoming vthe vdominant vindustry vleader

c) vfits van venterprise's vinternal vand vexternal vsituation, vhelps vbuild vsustainable vcompetitive vadvantage,
vand vimproves vcompany vperformance



d) vis vhighly vprofitable vand vboosts vthe vcompany's vmarket vshare

e) vcan vpass vthe vethical vstandards vtest, vthe vgood vstrategy vtest, vand vthe vprofitability vtest v- vAnswer v- vc)
vfits van venterprise's vinternal vand vexternal vsituation, vhelps vbuild vsustainable vcompetitive vadvantage, vand

vimproves vcompany vperformance