1.

Product leadership companies want to be first- to- market with their innovative or
enhanced features and functionality.
2. The key internal processes for Product leadership companies are in the INNOVATIVE
CLUSTER.
3. The operation management processes for product leadership companies are the lowest
cost in the industry. (False)
4. Product leadership companies want operating processes that can ramp up rapidly. (True)
Reason: So that manufacturing capacity constraints do not inhibit market- share
penetration.
5. The operating processes must also be flexible to allow for minor changes in product
characteristics.
6. Flexibility and improvement of operating processes are more important to product
leadership companies than low- cost production of highly stable products.
7. THE KEY INTERNAL PROCESSES for companies offering complete customer solution
ARE IN THE CUSTOMER MANAGEMENT CLUSTER.
8. The operation management processes for companies offering complete customer
solution, support the the customer management processes by bundling products and
services of suppliers, along with the company's own products and services.
9. A Company following a customer solution strategy may have operating processes that
are not lowest cost in the industry, as long as the higher cost processes contribute to
enhancing the customer's experience in buying the product/service.
10. In Company following a customer solution strategy, the innovation processes focus on
finding new ways to create value for customers.
11. In Company following a customer solution strategy, the employees must have a broad
base of skills so that customers can be handled by a single representative.
12. By combining CRM software with ABC, companies can measure customer profitability
accurately for each individual customer, gaining valuable information that enables
companies to transform unprofitable relationships into profitable ones.
13. Under lock-in strategy, companies generate long-term sustainable value by creating high
switching costs for their customers.
14. Companies following a low total cost strategy, offer their clients HIGHLY
COMPETITIVE PRICES, combined with consistent quality, excellent though not
comprehensive product selection.
15. Financial performance is a lag indicator.
16. The customer perspective defines the value proposition for targeted customer segments.
17. Choosing the customer value proposition is the central element of strategy.
18. Internal processes create and deliver the value propositions for customers.
19. Intangible assets are the ultimate source of sustainable value creation.
20. Learning and growth objectives describe how the people, technology and organization
climate combine to support the strategy.
21. Objectives in the four perspectives link together in a chain cause- and- effect
relationship.
22. Improvements in learning and growth measures are lead indicators for internal
processes, customer, and financial performance.
23. Low total cost companies are PRODUCT FOLLOWERS not LEADERS.(True)
Reason: They don't invest a great deal in product and service innovation. They need
capabilities for replicating the INNOVATION done by product leaders so that their
products and services do not become obsolete.
24. The main focus on innovation for low total cost companies, will be for PROCESSES not
PRODUCTS/Services.
25. The experience curve concept holds that the cost of doing a repetitive task decreases by
some % each time the cumulative volume of production doubles.
26. The changes occurring in the macro generic environment are common to all
organizations and impact all alike
27. Business are interested in the rate of economic growth true
Reason : Businesses are interested in the RATE OF ECONOMIC GROWTH, which
increases consumer income and spending levels, and this reduces competitive
pressures and increases opportunities for sales and profit

28. Higher consuming spending reduces competitive pressure and increases opportunities
for sales and profit
29. Managers watch for movement in interest rate , infilation and currency exchange rate
 Comment : Higher interest rates reduce consumer incentives to borrow and hence
limiting demand for durable goods.
 Inflation represents erosion in the value of a currency. Inflationary conditions
adversely affect a firm’s capital cost and restrict its expansion plans
 Currency exchange rates affects the price of goods in international markets

30. Discuss briefly the importance of industry analysis in strategic management

 Discuss: In addition to the macro environment, a firm’s industry environment
imposes conditions that may be favorable or threatening to the firm. Industry
conditions are assessed and described by the degree of competition occurring within
the industry. The firm can alter the industry conditions

31. Porters forces are

 the threat of entry by potential competitors
 The degree of rivalry among incumbent firms
 The bargaining power of suppliers
 The bargaining power of buyers
 The threat of substitute products

32. The stronger the forces suggested by porter , they will threaten a firm’s ability to realize
the sustained profit on it’s invested capital
33. The macro environment and the industry environment can both be altered by a firm
False
34. Porter contends that a firm will be successful when the industry has a-high profit
potential and competitors can’t easily get in due to c-high entry barriers

35. Are resource-based advantages more sustainable than positional advantages?

 discuss briefly : Most market environments evolve, as a result, POSITIONAL
ADVANTAGES cannot be permanent. An alternative approach explains
competitive advantage as a result of a firm’s internal strengths – a more enduring
advantage. The resource based view suggests that performance differences in firms
can be better explained on the bases of their internal strength.

36. Define value chain analysis and describe how it helps managers to assess the strengths
and weaknesses of their firm?
Porter proposed a model called value chain, to identify and assess a firm’s
operational competencies. Any product must go through stages of activities during
which value is added to the product at every stage before it is sold to the consumer.
(input is transformed into output). Primary activities are sequentially linked,
whereas support activities are linked to several primary activities simultaneously
37. Can a firm have both resources based advantage and positional advantage?
Reason: yes, because having resources means having skilled labors and good
organized information, and when this resources are rare and scarce it will give the
firm sustained edge over rival which represent positional advantage
38. The SWOT process is complemented by TWOS step .please comment briefly
39. The SWOT process places the firm in one of four categories. Describe briefly the four
categories, and which category is the most favorable.

Category 1.Abundant environmental opportunities and significant internal

strengths: the firm’s strategy should be to pursue aggressive growth that will use it’s
internal
Category2. Abundant environmental opportunities but significant internal
weaknesses: the strategy should be to eliminate weaknesses by acquiring the needed
competencies either through joint ventures and alliances or vertical mergers so that
opportunities can be exploited.
Category3. Major environmental threats but significant internal strengths: the
strategy should be either to alter industry forces or diversify into more attractive
industries.
 Category4. Major environmental threats and significant internal weaknesses: a firm
has a weak competitive position in an unattractive industry. The firm should consider
repositioning by moving into another segment or gain the required strengths through
horizontal mergers.
•Obviously, category 1 is the most favorable situation.

40. Describe briefly the value chain analysis

Primary activities are sequentially linked, whereas support activities are linked to
several primary activities simultaneously.
By analyzing these linkages, managers understand the kind of coordination needed
to enhance workflow efficiency, quality, and speed.

41. A company following a differentiation strategy is considering the possibility of shifting to

allow total cost strategy, what are basic differences and shifts in the humans resource
skills, information system focus ,and internal processes to be taken into consideration
bthe top management team ? Use two charts to convert between two strategies
42. Choosing the customer value proposition in the a- central element of strategy
43. Internal processes creates and deliver b-value propositions for customers

44. Enhancing and aligning intangible assets leads to improved process performance, which
in turn, drives success for customers and shareholders.