1. For commodity-like or undifferentiated products, the spread between what customers are willing to pay and the cost of providing the product itself is narrow. So, to increase profitability, the business must push the cost of providing the product lower, usually through finding ways to increase operating efficiencies. This is why this strategy works with products but not with services.

True

False

2. While Alfred Chandler argued that strategy drives structure, Hall and Saias argued that structure influences strategy, and Mintzberg argued that they are reciprocally related.

True

False

3. Clearly, the attitudes and actions of employees largely determine whether a strategy that has been formulated gets implemented, and these employees also largely determine the degree of implementation and success. That is why it is important to develop a "learning organization" approach and an organizational culture that is supportive of new strategies and change initiatives. If employees have been involved in the formulation of the strategy---indeed if the new strategy or change initiative is partially the result of what they have learned from the organization's ongoing system of learning processes---and if the idea for the new strategy was partially the result of their suggestions, then resistance to implementation can be dramatically reduced.

True

False

4. In order to maintain the organization's differentiation and competitive position in the market, managers can deliberately try to erect barriers to entry and to exploit the experience curve to establish the organization as the low-cost leader. However, through timidity, some managers quietly take a different approach, they don't maximize profits. While establishing a pricing structure that produces only modest profits might dissuade competitors from being drawn to the market, it is a cowardly and inappropriate tactic that shareholders rightly react to quite angrily when it is discovered.

True

False