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Exam 3: Designing a Competitive Business Model and Building a Solid Strategic Plan

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Question 21

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One of the goals of competitive analysis is to improve a firm's reaction time to competitor's actions.

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Question 22

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The mission statement addresses the first question of any business venture: "What business am I in?"

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A company's mission statement defines what it stands for, why it exists, and its reason for being.

Although developing a strategic plan is important for large companies, it is not essential to managing a small company successfully because of its limited resources.

A small business owner can collect a great deal of information about competitors through a number of low-cost competitive intelligence methods.

Cost-leadership may have which of the following inherent dangers?

Before an entrepreneur can build a successful strategy, she must establish a clear mission, goals, and objectives in order to have appropriate targets at which to aim her strategy.

A small company following a ________ strategy seeks to build customer loyalty by positioning its goods and services in a unique fashion.

Skatell's, a small jewelry store with three locations, designs and manufactures much of its own jewelry while its competitors (many of them large department stores) sell standard, "off-the-shelf" jewelry. As a result, Skatell's has developed a loyal customer base of people who seek unique pieces of jewelry. Skatell's reputation for selling unique and custom-designed jewelry allows them to benefit from a:

An ________ competitor offers the same or similar products of services only in a small number of areas, and their target customers seldom overlap yours.

The strategic planning process works best when employees are actively involved with managers in setting company goals and objectives.

The secret to good control is identifying and tracking key performance indicators.

When developing a company's mission statement, an entrepreneur should remember to:

A firm's strategy must focus on establishing for the firm the key success factors the entrepreneur has identified for the industry.

Conducting a SWOT analysis for her own business and for her key competitors allows an entrepreneur to gain a competitive edge by matching her company's strengths against her competitors' weaknesses.

Focus strategies build on differences among market segments.

"Increasing our market share from 8 percent to 10 percent by the end of the current fiscal year" is a good example of an effective objective.

Maria Sanchez is the owner of the Main Street Café and a new restaurant opens a few blocks away. From Maria's perspective, this new restaurant constitutes a(n) :

Assume that you are a consultant to a small independent hardware store in a town where a retail giant such as Wal-Mart, Kmart, or Target is about to open. The large retailer sells many of the same items the small hardware store sells, but at lower prices. What advice would you offer the owner concerning the hardware store's strategy? Explain.

"Big box retailers" present an opportunity for many small business owners.