Business Strategy

► A) By having a lower cost structure

► B) By cross-subsidizing one business from another

► C) By having "deeper pockets" to fund short to medium term losses

► D) All of the above

D) All of the above

► A) An organization achieves a proprietary position in its industry.

► B) Customers are tied into long-term contracts.

► C) An industry is dominated by a major player.

► D) Customer preferences are recorded in a CRM database.

A) An organization achieves a proprietary position in its industry

► A) Concentrating on a particular feature of a product or service to achieve differentiation

► B) Concentrating on differentiation as the primary means of achieving competitive advantage

► C) Providing a high-perceived value service or product to a selected market segment, this justifies a substantial price premium.

► D) Simultaneously seeking to achieve differentiation and a price lower than that of competitors

B) Concentrating on differentiation as the primary means of achieving competitive advantage

C) Providing a high perceived value service or product to a selected market segment which justifies a substantial price premium

► A) Game theory emphasizes short-term tactics to be employed in competitive strategies rather than a long-term strategy.

► B) Game theory is about thinking how competitors will respond in both the short term and the long term.

► C) Games assume competition between different players so game theory is especially useful in describing how competition occurs.

► D) Given the inter-dependence of competitors, game theory helps an understanding of how the decisions of one competitor affects upon another.

B) Game theory is about thinking how competitors will respond in both the short term and the long term

► A) Hyper-competitive strategies are about how to compete in fast changing business environments.

► B) Innovation in terms of bases of competitive strategy

► C) Hyper-competitive strategies are about building bases of sustainable differentiation.

► D) Hyper-competitive strategies acknowledge the bases of competitive advantage may not be sustainable and that disruption of the status quo may be important.

D) Hyper-competitive strategies acknowledge the bases of competitive advantage may not be sustainable and that disruption of the status quo may be important

► A) Where the bases of differentiation are valuable to the buyer

► B) Where the bases of the differentiation strategy are difficult for competitors to imitate

► C) Where it is difficult for buyers to shift their buying allegiances

► D) All of the above

D) All of the above

► A) Outsourcing

► B) Best value

► C) Superior services

► D) Best practice.

B) Best value

► A) Price-based strategies, differentiation, and diversification

► B) Price-based strategies, differentiation, and lock-in

► C) Change, adaptation and efficiency.

► D) Monopoly, cartel and market sharing

B) Price-based strategies, differentiation, and lock-in

► A) Being the lowest cost producer in the industry and offering the lowest prices

► B) Having the broadest range of different goods and services in the industry

► C) Having processes and systems, which are different from competitors

► D) Offering products or services, which offer different benefits from competitors' and which are valued by buyers.

D) Offering products or services which offer different benefits from competitors' and which are valued by buyers

There are two ways to control such risk:

You can tell people what to do or you can tell them what not to do. Telling people what to do helps assure that they will not make mistakes by engaging in unauthorized activities. This is the prudent approach if safety and quality are paramount concerns if, say, you are running a nuclear power plant or overseeing a space launch. In such cases you want employees to follow standard operating procedures to the letter.

Many managers complain that they are overwhelmed by how many things they are asked to keep track of in all-inclusive lists of performance measures. It is not uncommon for companies to create scorecards with 30, 40 or more variables, in the mistaken belief that adding measures results in a more complete and therefore better scorecard. Information technology enables us to gather more and more data at lower and lower cost but we cannot keep tracking so many variables. Effective managers monitor only a small number, those that could cause their strategy to fail.

As a business leader, one of your primary jobs is to make outside market pressures felt inside your business. This can motivate employees to think and act like winning competitors, rousing them from comfortable ruts. The bigger your business, the more insulated people are from market pressures and the more imperative this becomes.

If you said, to make a profit, he laughs and in his Viennese accent, informs you that, "You don't know anything about business" and adds, "The answer is not only false, it is irrelevant." He then goes on to explain to you that the purpose of the business is to create a customer.

Companies that execute strategy well define their core values to reflect the relative importance of shareholders, employees and customers. Value statements that list aspirational behaviors are not enough. Core values must indicate whose interests come first when difficult trade-offs must be made.

At some companies, customers come first. At others, it may be shareholders. At yet others, it may be employees. There is no right or wrong choice. Each choice is based on a different theory of value creation but making one and communicating it effectively are essential.

Choosing a primary customer is a make-or-break decision because it should determine how you allocate resources.

The idea is simple:

Allocate all possible resources to meet and exceed your primary customer's needs.

Another way of forcing employees to think outside the box is to assign them to a second box. New perspectives emerge when people are forced out of their routines. When they attend cross-unit team meetings, employees not only serve as emissaries for their home units but also return with ideas and innovations from their new colleagues. One way to force employees to think outside the box is to assign them to a second box.

Executing strategy successfully requires making tough, often uncomfortable choices based on simple logic and clear principles. But we frequently avoid making choices, in the mistaken belief that we can have it all. Instead of focusing on one primary customer, we have many kinds of customers. Instead of instilling core values, we develop lists of desired behaviors. Instead of focusing on a few critical measures, we build overloaded scorecards.

Every strategy carries the risk that an individual's actions will push the business off course. The risk intensifies when managers feel pressure to hit growth and profit targets.

If you want people to innovate, try holding them accountable for measures that are broader than the resources they control. This is the well-worn path followed by every successful entrepreneur and you can use it to foster entrepreneurial behavior within your business.

Many high-innovation organizations rank employees on the basis of demonstrated performance. The rankings affect who is promoted, who is placed on probation and who is asked to leave. The challenge, of course, is to prevent the competition from becoming negative and destructive.