495 Practice Exams

Firms that can employ and establish _________________, are more likely to protect their competitive advantage from being copied and/or eroding away. -key human capital -isolating mechanisms -cash equivalents -a strong competitor response

Isolating mechanisms

________ are the legal owners of public companies. -employees -shareholders -category captains -creditors

Shareholders

Which of the following is an external performance metric? -ROR -Fixed Asset Turnover -Inventory Turnover -Total return to shareholders

Total return to shareholders

Which of the following will most likely be considered as an airlines core competency? -the airline's ability to navigate federal laws just like its competitors -the airline's ability to partner at the same airports as their competitors -the airline's ability to make its fleet more fuel efficient than their competitors -the airline's ability to manufacture planes at a cost that is average in the industry

the airline's ability to make its fleet more fuel efficient than their competitors

In strategic management, strategists engage in three pillars. Which of the following is not one of these three pillars? -the implementation of major goals and objectives -the analysis of major goals and objectives -the formulation of major goals and objectives -the unification of major goals and objectives

the unification of major goals and objectives

Which of the following strategy plans might work best in an industry that is considered a fast-changing environment with new laws going into effect regularly? -scenario planning -top down planning -bottom up planning -dominant planning

scenario planning

Which of the following below is NOT categorized as a primary activity on Porter's Value Chain? -procurement -operations -after sales service -marketing and sales

Procurement

According to the resource-based view, a firm's competitive advantage often stems from its -intangible resources -tangible resources -dynamic strengths -external environment

intangible resources

One of the reasons that Circuit City filed for bankruptcy was due to its inability to reinvest, hone, and upgrade its once impressive resource base. Ultimately, Circuit City's core competences became -core rigidities -value chain activities -strategic resources -costly to imitate

Core rigidities

Tesla is addressing environmental concerns regarding the carbon emissions of gasoline-powered cars by building zero-emission battery-powered vehicles. This best represents which of the following PESTEL categories? -ecological -economic -political -technological

Ecological

A firm will fail to create a sustained competitive advantage when the -fit between its internal strengths and the external environment is static. -source of its competitive advantage is causally ambiguous. -source of its competitive advantage is socially complex. -resource bundles exhibit heterogeneity and immobility.

fit between its internal strengths and the external environment is static

Samsung and Google cooperate as complementors to compete against Apple's strong position in the mobile device industry, while at the same time Samsung and Google are increasingly becoming competitive with one another. This scenario best illustrates the process of -co-opetition -perfect competition -monopolization -conglomeration

co-opetition

Which of the following below are not one of the three dimensions that make up the Triple Bottom Line framework? -economic value creation -accounting profitability -shareholder wealth creation -none of the answers are correct

none of the answers are correct

According to Porter's Five Forces approach, the overall goal of applying the Five Forces analysis to an industry is to make a judgment about its -overall attractiveness -revenue streams -future volatality -market share

overall attractiveness

In order to better achieve a competitive advantage, firms must now adopt a holistic approach towards satisfying multiple stakeholders opposed to focusing on the needs of their stockholders. This integrative approach is referred to as -stakeholder strategy -internal shareholder strategy -integration strategy -exchange relationship strategy

stakeholder strategy

Which of the following statements with regard to industry structures is true? -They are stable over time, not dynamic. -Having a large number of competitors generally equates to higher industry profitability. -A consolidated industry tends to be more profitable than a fragmented one. -Having few but large competitors increases the threat of strong competitive forces such as supplier or buyer power.

A consolidated industry tends to be more profitable than a fragmented one.

Tommy wants to open his own food truck but doesn't know anything about business. He needs help determining who his competition is, how he should craft his strategy to compete and how he'll implement his strategy to achieve a competitive advantage. He's hired you to help him get started. As a result, you know that you will probably use the -AFI strategy framework -business model analysis -six sigma tool -stakeholder impact analysis

AFI strategy framework

Bill Lewis wants to become a business strategy consultant and doesn't understand how emerging consultants get started. Bill should familiarize himself with the ________ framework that outlines the important process when examining the concept of strategic management. -AFI: Analyze-Formulate-Implement -AFE: Analyze-Formulate-Execute -API: Analyze-Plan-Implement -APE: Analyze-Plan-Execute

AFI: analyze-formulate-implement

A "perfectly competitive" industry is one that -has commodity product offerings. -usually exhibits low profitability. -have difficulty achieving even a temporary competitive advantage. -all answer are correct

All answers are correct

Under the ________ framework, the question "How do we create value?" is relevant when trying to improve innovation and organizational learning. -triple bottom line -economic value creation -balanced scorecard -operation effectiveness

Balanced scorecard

When performing internal analysis of firms, how would you answer the question, "why do companies exist?" -Companies exist because they create value for customers in ways that customers are unable to replicate on their own. -Companies exist because they provide a means of investment income for shareholders, who otherwise would be able to invest only in government securities. -Companies exist because they provide a tax base for government to draw upon in creating and maintaining public works projects. -Companies exist because they give college professors something to teach about.

Companies exist because they create value for customers in ways that customers are unable to replicate their own

Susan is trying to determine if her company has a competitive advantage. She must be able to accomplish two critical tasks before she can substantiate this claim. First, she must assess the performance of her company accurately; second, she must -assess her capital and liquid position to ensure funding for future projects. -focus on creating value by utilizing operational effectiveness such as Six Sigma and lean manufacturing. -compare and benchmark her firm's performance to other competitors in her same industry. -ensure the right strategic leaders are in place that can execute her strategy.

Compare and benchmark her firm's performance to other competitors in her same industry

The first step in stakeholder impact analysis involves -formulating a stakeholder strategy to balance the different needs of various stakeholders. -identifying the opportunities and threats the stakeholders present. -describing the economic, legal, ethical, and philanthropic responsibilities of the firm toward society. -identifying the stakeholders that currently have, or potentially can have, a material effect on a company.

Identifying the stakeholders that currently have, or potentially can have, a material effect on a company

Which of the following summarizes the difference between corporate strategy and business strategy? -Corporate strategy deals with how to compete; business strategy deals with where to compete. -Corporate strategy deals with when to compete; business strategy deals with how to compete. -Corporate strategy deals with how to compete; business strategy deals with when to compete. -Corporate strategy deals with where to compete; business strategy deals with how to compete.

Corporate strategy deals with where to compete; business strategy deals with how to compete.

Bill's Auto & Airplane Repair shop is able to generate a positive net income of $10,000 a week; this is the industry average. We can conclude that since he has a positive net income, he also has a competitive parity in the industry. -Correct—competitive advantage is achieved through profitability alone. -Correct—competitive advantage is achieved since Bill's Auto & Airplane Repair shop has a positive net income. -Correct—competitive parity is achieved by generating average returns, relative to competition in a given industry. -Incorrect—Bill's Auto & Airplane Repair shop more than likely has a sustained competitive advantage since his business is diversified.

Correct--competitive parity is achieved by generating average returns, relative to competition in a given industry

Bill Burke is the CEO of Project Inc. a supply chain firm. Bill's company considers installing a new piece of machinery in one of his factories. Installing this new machinery will cost money; paying the technicians to install the machinery, transporting the machinery, buying the parts and so on. Bill plans on financing his operations by issuing stock (equity) and issuing bonds (debt). He needs his return on invested capital (ROIC) to exceed his ________ in order to determine if he should take on the project. -return on revenue -payback period -cost of capital -cost of stock

Cost of capital

Visionary companies differ from their competition in that -employees in visionary organizations find meaning in their work and are motivated. -a visionary company focuses on scenario planning and future competitive threats. -in a visionary company it is the CEO's managerial style that gives the company its emergent strategy. -visionary companies typically emphasize measuring financial performance.

Employees in visionary organizations find meaning in their work and are motivated

Tony's Pizza Shop is able to net $10,000 a week; this makes his shop profitable. His number one competitor, Leo's Pies is also profitable, netting $12,000 a week. Lil Anthony's Pizza Palace nets $13,000 a week. Since Tony's Pizza Shop is profitable, we can conclude that he has a competitive advantage in the industry. -True—competitive advantage is achieved through profitability alone. -True—competitive advantage is achieved since Tony has a positive net income. -False—competitive advantage is only achieved by generating above average returns, relative to competition. -False—Tony more than likely has a sustained competitive advantage since he's been in business longer.

False--competitive advantage is only achieved by generating above average returns, relative to competition

Andrew is a management consultant. Hard Supplies Inc. asks him to evaluate their company, and he finds that the difference between the cost of producing the firm's products and the value of those products is extremely narrow. What should Andrew suggest that Hard Supplies Inc. management do? -Find a way to widen the gap between cost and value. -Find a way to pass on as much profit as possible to suppliers and customers. -Shore up the company's strong position by erecting entry barriers. -Encourage customers to buy complements to their products.

Find a way to widen the gap between cost and value

Which of the following terms describes the guiding policy to address the competitive challenge, and uses corporate- and business-level strategy? -analysis -formulation -implementation -competitive advantage

Formulation

LinkedIn, a professional social media website, allows its users to create their profiles for free, but charges a premium price for additional services. This is an example of a ________ business model. -subscription-based -peer to peer -crowdsourcing -freemium

Freemium

Organizational values help people make choices that are ethical and company-goal-oriented. These values answer which strategic management question? -What do we want to accomplish as a company? -How do we accomplish our goals in the organization? -What are we about as a firm compared to our competitors? -What is the best way to compete in the industry?

How do we accomplish our goals in the organization?

Do vision statements help firms gain and sustain competitive advantage? -It depends, because the effectiveness of vision statements differ by type. -Yes, but only if the vision statements are short, concise and are well written. -No, vision statements do not, but mission statements do. -Only if the vision statement follows the strategic management process.

It depends, because the effectiveness of vision statements differ by type

Jill is interested in the concept of strategy and decides to create her own. As a result, Jill says that her strategy is to focus on growth and marketing to achieve competitive advantage. How would you evaluate Jill's statement? -Jill's strategy makes sense and she should move forward with it. -Jill's strategy reveals a clear strategic position and tradeoff, so she should proceed. -Jill should reevaluate her statement because it fails to mention human resources and finance. -Jill should reevaluate her statement because it fails to meet the principles of what a strategy should be.

Jill should reevaluate her statement because it fails to meet the principles of what a strategy should be.

Brandon is part of a sales team. He effectively coordinates his tasks with others in the team and willingly contributes to their efforts in achieving the team's objectives. Thus, Brandon is in ________ of the Level-5 leadership pyramid. -Level 5 -Level 4 -Level 3 -Level 2

Level 2

Which of the following is a drawback of Porter's five forces model? -The model describes competition narrowly as a firm's closest competitors. -Managers cannot determine the changing speed of an industry or the rate of innovation. -It fails to provide a basis for deriving implications for a firm's strategic position within an industry. -The model fails to consider that threat of substitutes can come from outside a given industry.

Managers cannot determine the changing speed of an industry or the rate of innovation

Firms that compete within the same strategic group generally experience -more competitive rivalry than firms outside their strategic group. -less competitive rivalry than firms outside their strategic group. -the same competitive rivalry than firms outside their strategic group. -no competitive rivalry because they are substitutes.

More competitive rivalry than firms outside their strategic group

________ is the benefit that is missed or given up when an investor, individual or business chooses one alternative over another. -value creation -opportunity cost -accounting profitability -reservation price

Opportunity cost

________ are considered the ethical standards and norms that govern the behavior of individuals within a firm. -organizational core values -mission statements -strategic leadership -vision statements

Organizational core values

________ are considered the ethical standards and norms that govern the behavior of individuals within a firm. -organizational core values -mission statements -vision statements -strategic leadership

Organizational core values

Value chain analysis consists of systematically analyzing a firm's key activities that for analysis purposes are categorized into two groups: -Primary activities and support activities -Products and service activities -Customers and suppliers -Profits and losses

Primary activities and support activities

The "Natural Nourishment" granola bars manufactured by Global Good Foods have been the top-selling granola bars in the market. Though the market for granola bars is flooded with competitors, Global Good has been able to maintain its market position for a long time. This is mainly attributed to the pleasant texture of its granola, which comes from a proprietary processing technique used by the company. This competency of Global Good Foods will be considered as a(n) _____ resource in the VRIO framework. -imitable -rare -intangible

Rare

When conducting a _______________, it's best to examine both PESTEL and Porter's five forces analyses because these tools focus on the external environment. -SWOT analysis -value chain analysis -VRIO framework -resource-based analysis

SWOT analysis

The three financial ratios that constitute return on revenue are Cost of goods sold/Revenue, Research & development expense/Revenue, and -Accounting profitability/Revenue. -Economic value created/Revenue. -Total return to shareholders/Revenue. -Selling, general, & administrative expense/Revenue.

Selling, general, & administrative expense/Revenue.

In recent years a growing number of U.S. consumers have become more health-conscious about what they eat. According to the PESTEL Framework this trend could best be classified as a ________ trend. -sociocultural -healthy eating -political -legal

Sociocultural

As the CEO of a conglomerate, Sarah Cane exhibited her strong commitment toward the company's core value that customers' well-being is more important than profit when she convinced the board of directors to liquidate the company's pesticide subsidiary. The pesticide brand sold by her company was a major revenue earner in lesser-developed nations, but studies indicate that it is a carcinogen. Eva persuaded the board that the company had to be responsible toward society. In this scenario, Sarah has demonstrated -strategic leadership -intrapreneurship -machiavellianism -individualism

Strategic leadership

The process that describes the method by which managers conceive of and implement a strategy that can lead to a sustainable competitive advantage is called -strategic process -strategic technology -strategic management -strategic planning

Strategic management

A firm's ________ relates to its ability to create value for customers (V) while containing the cost to do so (C). -Strategic position -Growth strategy -Industry analysis -Co-operative strategy

Strategic position

Keeping in mind the five forces in the airline industry, which of the following best explains the difficulty airlines have in generating a profit? -Substitutes are readily available in the form of trains, buses, and cars, thus reducing the profit potential in the industry. -Suppliers have weak bargaining power because they offer products that are not differentiated. -Entry barriers in the industry are high, resulting in hardly any new airlines popping up. -Consumers in the industry make decisions based on price, thus reducing the intensity of rivalry in the industry.

Substitutes are readily available in the form of trains, buses, and cars, thus reducing the profit potential in the industry

Which of the following is not captured when examining a competitive industry structure? -the ability to engage in forward vertical integration -the number and size of an industries competitors -the firm's degree of pricing power -the type of product or service (commodity or differentiated product)

The ability to engage in forward vertical integration

Tom is attempting to measure how his customers views his firm. To do this, he uses the balanced-scorecard framework because he knows that -customer surveys will help him determine future industry attractiveness. -this will guarantee his company a sustainable competitive advantage. -the framework will help him increase his stock price. -the customer perspective is directly linked to firm revenues and profits.

The customer perspective is directly linked to firm revenues and profits

Swedish furniture giant IKEA reported sales of $44 billion in 2019. The company turned a profit by recycling waste into some of its best-selling products. Before, this waste had cost the company more than $1 million per year. And the company is well on its way to "zero waste to landfill" worldwide. According to Joanna Yarrow, IKEA's head of sustainability for the United Kingdom, "We don't do this because we're tree huggers, we do this because it's very cost-effective." This passage best represents which of the following frameworks below? -balanced scorecard framework -PESTEL framework -triple-bottom-line framework -economic value framework

Triple-bottom-line framework

WeComput Inc.'s competency in designing and manufacturing efficient microprocessors has made its laptops the most advanced computers in the market. This competency, along with the just-in-time manufacturing system, has enabled WeComput Inc. to increase its profitability by lowering its production costs. Thus, WeComput's competency in designing and manufacturing microprocessors will be considered a(n) _____ resource in the VRIO framework. -valuable -rare -imitable -organized

Valuable

Which of the following best represents a customer-oriented vision statement? -"We provide solutions to professional communication needs." -"We are in the typewriter business." -"To be the safest, most progressive North American railroad." -"We aim to build the fastest computing devices in the World."

We provide solutions to professional communications needs

All of the following are external stakeholders except which of the following? -Customers -Creditors -Alliance partners -Competitors

competitors

Most consumers and investors today want the firms they do business with to look beyond just the profit motive. In fact, they want firms that behave legally and ethically while also giving back to their communities via philanthropic activities. The framework that attempts to reconcile these wants is known as -corporate social responsibility -stakeholder impact analysis -business model analysis -value chain driven decision making

corporate social responsibility