,Essentials of Strategic Management, 6e (Gamble)
Chapter 1 Strategy, Business Models, and Competitive Advantage
1) Managers in all types of businesses must develop a clear answer for which of the following
questions?
A) Where are we now?
B) Where do we want to go from here?
C) What is the set of actions that we need to take to outperform the company's competitors and
achieve superior profitability?
D) When will we know we are there?
E) What moves and approaches do we need to gain an advantage in the marketplace?
Answer: C
Explanation: A company's strategy is the set of actions that its managers need to take to
outperform the company's competitors and achieve superior profitability.
Difficulty: 1 Easy
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 Understand what is meant by a company's strategy.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2) A company's strategy consists of
A) actions to develop a more appealing business model than rivals.
B) plans involving alignment of organizational activities and strategic objectives.
C) offensive and defensive moves to generate revenues and increase profit margins.
D) competitive moves and approaches that managers have developed to grow the business,
attract and please customers, conduct operations, and achieve targeted objectives.
E) its strategic vision, its strategic objectives, and its strategic intent.
Answer: D
Explanation: A strategy stands a chance of succeeding only when it is predicated on actions,
business approaches, and competitive moves aimed at appealing to buyers in ways that set a
company apart from rivals.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 Understand what is meant by a company's strategy.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
,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) moves to imitate key rivals.
C) strategic mission.
D) business model.
E) strategic vision.
Answer: A
Explanation: A strategy is predicated on actions, business approaches, and competitive moves
aimed at appealing to buyers in ways that set a company apart from rivals. Simply trying to
mimic the strategies of the industry's successful companies never works.
Difficulty: 1 Easy
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-02 Explain why a company needs a creative, distinctive strategy to set it
apart from rivals.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4) The essence of strategy is
A) developing lasting success that can support growth and secure the company's future over the
long term.
B) recreating a business model with regularity.
C) matching rival businesses' products and quality dimensions in the marketplace.
D) building profits for short-term success.
E) realigning the market to provoke change in rival companies.
Answer: A
Explanation: Strategy at its essence is about setting a company apart from its rivals and staking
out a market position that is not crowded with strong competitors. A company aims at doing
what rivals cannot or do not do.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-02 Explain why a company needs a creative, distinctive strategy to set it
apart from rivals.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
, 5) A company's strategy has a chance of succeeding only when it is predicated on
A) building revenues, controlling costs, and generating an attractive profit.
B) actions, business approaches, and competitive moves aimed at appealing to buyers and setting
the company apart from rivals.
C) management's concepts of "where we have been," "where we are headed," and "where we
need to go."
D) the approval of a business model by a company's board of directors that spells out how to
outcompete its rivals and make the company profitable.
E) educated choices that management has made regarding which financial and operating plans to
pursue.
Answer: B
Explanation: Strategy spells out why the company matters in the marketplace by defining its
approach to creating superior value for customers and how capabilities and resources will be
employed to deliver the desired value to customers. In effect, the crafting of a strategy represents
a managerial commitment to pursuing an array of choices about how to compete.
Difficulty: 1 Easy
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-02 Explain why a company needs a creative, distinctive strategy to set it
apart from rivals.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
6) Which of the following is not something a company's strategy is concerned with?
A) Management's choices about how to attract and please customers
B) Management's choices about how quickly and closely to copy the strategies being used by
successful rival companies
C) Management's choices about how to grow the business
D) Management's choices about how to outcompete rivals
E) Management's action plan for conducting operations and improving the company's strategic
and financial performance
Answer: B
Explanation: Simply trying to mimic the strategies of the industry's successful companies never
works. Rather, every company's strategy needs to have some distinctive element that draws in
customers and produces a competitive edge.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-02 Explain why a company needs a creative, distinctive strategy to set it
apart from rivals.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
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