Framing

$1.$ Vanguard's strategy is:

a$.$ product driven.

b$.$ cost leadership.

c$.$ easy to duplicate effectively.

d$.$ inconsistent.

Labeling

$2.$ If Vanguard were to conduct a SWOT analysis, which of the following would be considered a strength?

a$.$ Competitors offer nonindexed funds.

b$.$ The mutual fund market is reaching the maturity stage.

c$.$ Vanguard conducts transactions through the Web.

d$.$ Vanguard's competitors distribute funds through outside brokerage houses.

Summarizing

$3.$ By shunning advertising on traditional media and conducting transactions through its website, Vanguard:

a$.$ can introduce commission$-$based incentives for its employees.

b$.$ offers loaded and non$-$loaded funds.

c$.$ distributes funds through outside brokerage houses.

d$.$ is able to employ a business level strategy of cost containment.

Synthesizing

$4.$ Vanguard feels confident it can create a nonindexed fund that will consistently perform above the S&P $500.$ Doing so will likely:

a$.$ require Vanguard to advertise in traditional media.

b$.$ increase costs for customers.

c$.$ conduct transactions by phone.

d$.$ increase Vanguard's market share within the industry.

Concluding

$5.$ The future of Vanguard:

a$.$ is weak because of the rising cost of technology.

b$.$ will not be web$-$based.

c$.$ is tentative because their strategy is easy to imitate.

d$.$ looks promising because of a strategic advantage.