Question

Excellent execution of a successful strategy is

a. the best test of whether a company is a "true" industry leader.

b. the best evidence that the company has a sustainable competitive advantage.

c. the best evidence that managers have an emerging business model.

d. a solid indication that managers are maximizing profits and looking out for the best interests of shareholders.

e. the best test of managerial excellence and the best recipe for making a company a standout performer.

Answer 1

Excellent execution of a successful strategy is the best evidence that the company has a sustainable competitive advantage (option b) and is a standout performer in its industry.

Step-by-step explanation:

Excellent execution of a successful strategy is the best evidence that the company has a sustainable competitive advantage. This means that the company has a unique position in the market that allows it to outperform its competitors consistently.

A sustainable competitive advantage can come in different forms:

1. Economies of scale: When a company can produce goods or services at a lower cost per unit as it increases its production levels.
2. Reputation for slashing prices in response to new entry: A company that has a reputation for being price competitive and can quickly adjust its prices to deter new entrants.
3. Well-respected brand name: A company that has built up a strong brand over time, which creates customer loyalty and makes it more difficult for competitors to compete.

When a company executes its strategy excellently, it demonstrates that it has identified and capitalized on its unique advantages. This not only indicates managerial excellence but also positions the company as a standout performer in its industry.