Chapter 5

90. What are the five generic competitive strategies? Briefly describe each one and
identify the type of competitive advantage that each strategy is aimed at achieving.

91. Describe the strategy of striving to be the industry's overall low cost provider. What
does a company have to do to achieve low-cost provider status?

92. Describe the two basic cost-reducing approaches a company can take to become a
low-cost provider in its industry.

93. Which one of the five generic competitive strategies is most likely to be best suited
for an industry whose product is a commodity? Explain.

94. What market conditions and circumstances make a low-cost provider strategy
attractive? What are the pitfalls in pursuing a low-cost provider strategy? What can go
wrong?

95. What are the distinctive features of a broad differentiation strategy? Under what
circumstances is a broad differentiation strategy appealing?

96. What are the pros and cons of a broad differentiation strategy?

97. What are the distinctive features of a best-cost provider strategy? Under what
circumstances is a best-cost provider strategy appealing?

98. What type of competitive advantage does a best-cost provider strategy aim at
achieving? Explain what a company has to do to achieve this advantage.

99. Explain how the strategic target of a low-cost provider differs from the strategic
target of a best-cost provider.

100. What are the distinctive features of a focused low-cost strategy? How does it differ
from a low-cost leadership strategy?

101. What are the distinctive features of a focused differentiation strategy? How is it
different from a broad differentiation strategy?

102. What is the difference between a low-cost leadership strategy and a focused low-
cost strategy?

103. How does a focused differentiation strategy differ from a broad differentiation
strategy?

104. In what market and competitive circumstances are focused low-cost and focused
differentiation strategies attractive?

105. Explain how the marketing emphasis of a low-cost provider differs from the
marketing emphasis of a best-cost provider.

106. Explain how the keys to sustaining a broad differentiation strategy differ from the
keys to sustaining a best-cost producer strategy.

107. What are the keys to sustaining a focused low-cost strategy?

108. One of the big dangers in crafting a competitive strategy is that managers, torn
between the pros and cons of the various generic strategies, will opt for "stuck in the
middle" strategies that represent compromises between lower costs and greater
differentiation and between broad and narrow market appeal. True or false? Explain your
answer.

109. For a company's competitive strategy to succeed in delivering favorable
performance and the intended competitive edge over rivals, it has to be well-matched to a
company's internal situation and underpinned by an appropriate set of resources, know-
how, and competitive capabilities. True or false? Explain your answer.



























Chapter 6

77. Strategic offensives should, as a general rule, be grounded in a company's strategic
assets and employ a company's strengths to attack rivals. Define and discuss the term
strategic assets and its significance in gaining a competitive advantage.

78. There are a number of offensive strategy options for improving market positions
using cost-based and blue-ocean type strategies. Define the terms and suggest ways in
which the strategies could be operationalized.

79. What is a blue-ocean strategy and what is its appeal?

80. Identify and briefly discuss two "best targets" for offensive attacks by companies.

81. Discuss why timing of strategic moves is important.

82. Identify and briefly explain what is meant by each of the following terms.
a) Horizontal scope
b) Vertical scope
c) Scope of the firm

83. Identify and briefly explain what is meant by each of the following terms.
a) A first-mover advantage
b) A first-mover disadvantage (or late-mover advantage)

84. Under what sorts of circumstances are horizontal mergers and/or acquisitions of other
companies a better solution than entering into partnerships or alliances with these
companies? How do mergers and/or acquisitions contribute to enhancing a company's
position?

85. What are the general strategic objectives of merger and acquisition strategies?

86. What are the strategic advantages of a backward vertical integration strategy?

87. What are the strategic disadvantages of a backward vertical integration strategy?

88. What are the strategic advantages of a forward vertical integration strategy?

89. What are the strategic disadvantages of a forward vertical integration strategy?

90. What are the merits of outsourcing the performance of certain value chain activities
as opposed to performing them in-house? Under what circumstances does outsourcing
make good strategic sense?

91. Identify and explain at least two drawbacks to forming a strategic alliance.
92. What are the three principal advantages of strategic alliances over vertical integration
or mergers/ acquisitions?

93. What does a company racing for global market leadership need strategic alliances
for?

94. What does a company racing to stake out a strong position in an industry of the future
need strategic alliances for?

95. Identify at least three factors that can aid companies in forming a successful strategic
alliance?

96. Identify and briefly discuss four disadvantages of a vertical integration system?

97. What are the advantages of strategic alliances and collaborative partnerships with key
suppliers?

98. What are the merits of strategic alliances and collaborative partnerships for
companies racing for global market leadership? Under what circumstances do they make
sense? How do they contribute to competitive advantage?

99. What are the merits of strategic alliances and collaborative partnerships for
companies racing to seize opportunities in an industry of the future? Under what
circumstances do they make sense? How do they contribute to competitive advantage?

100. Identify and briefly discuss three factors a company must consider in order to
capture the benefits of engaging in strategic alliances.



















Chapter 7

119. What are the key reasons (identify and briefly discuss) why a company may
consider expanding outside its domestic market?

120. Explain why the strategies of firms that expand internationally are usually grounded
in home-country advantages or core competencies.

121. Briefly identify the special features of competing in foreign markets.

122. Explain how exchange rate fluctuations pose a risk to manufacturing companies that
rely upon an export strategy to compete in foreign markets

123. Identify and explain the significance of each of the following terms and concepts:
a). global strategy
b). export strategy
c). licensing strategy
d). franchising strategy

124. Compare and contrast the advantages for entering and competing in foreign markets
for the strategic options of exporting, licensing, and franchising.

125. Identify and briefly describe any three of the five generic strategic options for
competing in foreign markets.

126. What are the pros and cons of using strategic alliances to try to enhance a company's
ability to compete in foreign markets?

127. Discuss in some detail the difference between a multidomestic strategy and a global
strategy. Give the pros and cons of each.

128. What circumstances call for use of a multidomestic strategy for competing in
international markets?

129. When is a global strategy "superior" to a multidomestic strategy?

130. What are the four things a company needs to consider or do if it is to make the most
of strategic alliances with foreign partners?

131. Briefly discuss why a domestic company desirous of entering foreign markets might
see attractive advantages in forming strategic alliances with foreign companies. What are
the risks and disadvantages of such alliances?

132. A global strategy embraces the theme "think global, act global," whereas a
multidomestic strategy relies more on a "think global, act local" mentality. True or false?
Explain.
133. Explain the differences between a "think global, act global" strategy and a "think
global, act local" strategy.

134. Explain why a company desirous of competing in foreign markets needs to pay
careful attention to where it locates it value chain activities.

135. Under what circumstances is it advantageous for a company competing in foreign
markets to concentrate its value chain activities in a select few locations?

136. Under what circumstances is it advantageous for a company competing in foreign
markets to disperse certain value chain activities across many countries?

137. Discuss why a company desirous of competing in foreign country markets needs to
pay close attention to the advantages of the cross-border transfer of competencies and
capabilities. Are these transfers often a key to competitive advantage? Why or why not?

138. What are the strategic options (identify and briefly describe) for tailoring a
company's strategy to compete in emerging country markets?

139. Identify and briefly describe a local company's strategic options in competing
against global challengers?

























Chapter 8

151. What is the purpose of diversification?

152. Briefly discuss when it makes good strategic sense for a company to consider
diversification.

153. Identify and briefly discuss each of the three tests for determining whether
diversification into a new business is likely to build shareholder value.

154. The attractiveness test is the most important test for determining whether
diversification into a new business is likely to result in 1 + 1 = 3 increases in shareholder
value (as opposed to simply a 1 + 1 = 2 type of increase). True or false? Justify and
explain your answer.

155. Explain the relevance of the following as they relate to building shareholder value
via diversification:
a) The industry attractiveness test
b) The cost-of-entry test
c) The better-off test

156. Identify and explain the meaning and strategic significance of each of the following
terms:
a) Related diversification
b) Unrelated diversification
c) Strategic fit
d) Economies of scope
e) Divestiture
f) Corporate restructuring

157. Identify and briefly discuss each of the three options for entering new businesses.
What are the driving choice parameters for entry into new businesses and which one is
the most popular in the sense of being used most frequently?

158. Carefully explain the difference between and the rationale for selecting a strategy of
related diversification and/or a strategy of unrelated diversification

159. Which is the better approach to diversificationa strategy of related diversification
or a strategy of unrelated diversification? Explain and support your answer.

160. What is meant by the term strategic fit? What are the advantages of pursuing
strategic fit and matchups in choosing which industries to diversify into?

161. Discuss the pros and cons of a strategy of unrelated diversification.

162. Identify and briefly describe the six steps involved in evaluating a diversified
company's business lineup and diversification strategy.

163. What does the industry attractiveness test involve in evaluating a diversified
company's business lineup? Why is it relevant?

164. What is the relevance of quantitatively measuring the competitive strength of each
business in a diversified company's business portfolio and determining which business
units are strongest and weakest?

165. Briefly explain what is meant by each of the following terms:
a) Relative market share
b) Resource fit
c) A cash hog business
d) A cash cow business

166. What are the advantages and benefits of using an industry attractive-business
strength matrix to evaluate a diversified company's lineup of businesses?

167. What is meant by the term resource fit as it applies to evaluating a diversified
company's business lineup?

168. Explain the difference between a cash cow business and a cash hog business.

169. Shareholder interests are generally best served by concentrating corporate resources
on businesses that can contend for market leadership. True or false? Explain your answer.

170. Why is it pertinent in evaluating a diversified company's business lineup to rank a
diversified company's businesses on the basis of their future performance prospects?

171. Once a company has diversified into a collection of related or unrelated businesses
and concludes that some strategy adjustments are needed, what are the four main strategic
paths it can employ to improve the performance of its overall business lineup?

172. Under what circumstances might an already diversified company choose to enter
additional businesses and broaden its diversification base?

173. Under what circumstances might a diversified firm choose to divest one of its
businesses?

174. Under what circumstances might an already diversified company choose to pursue
corporate restructuring?