Strategic Planning for Competitive Advantage

14834 Words Nov 8th, 2014 60 Pages
Chapter 2—Strategic Planning for Competitive Advantage

TRUE/FALSE

1. The manufacturer of Macho brand martial arts products was implementing a strategic plan when it sponsored a local karate tournament for teenagers.

ANS: F
Such a short-range decision is typically a tactical plan or operating decision, not a strategic plan.

PTS: 1 OBJ: 02-1 TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy MSC: BLOOMS Level III Application

2. Berkshire Hathaway Inc., a large property insurance company, owns a large chain of jewelry stores and has recently purchased Russell Corporation, a manufacturer of sporting goods. Berkshire Hathaway uses a market penetration strategy.

ANS: F
Berkshire Hathaway uses a diversification strategy.
PTS: 1 OBJ:
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Developing a cost competitive advantage can enable a firm to deliver superior customer value.

ANS: T PTS: 1 OBJ: 02-6
TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy
MSC: BLOOMS Level VI Evaluation

15. As marketers gain more experience in marketing a product, costs tend to decrease, which is an example of the maturity effect.

ANS: F
This is an example of the experience curve, which means costs decline at a predictable rate as experience with a product increases.

PTS: 1 OBJ: 02-6 TOP: AACSB Reflective Thinking
KEY: CB&E Model Product MSC: BLOOMS Level IV Analysis

16. Niche competitive advantages are quite common.

ANS: T
The text lists several examples of how companies have created niche competitive advantages.

PTS: 1 OBJ: 02-6 TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension

17. To be useful, marketing objectives should be realistic, measurable, time specific, and based on sales.

ANS: F
Useful marketing objectives should be realistic, measurable, time specific, and compared to a benchmark. They do not have to be based on sales.

PTS: 1 OBJ: 02-7 TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension

18. The company’s objective is to increase sales next year. This is an example of a well-stated objective.

ANS: F
This objective is not specific or compared to a benchmark.

PTS: 1 OBJ: 02-7 TOP: