BUAD 4020 MIDTERM

Which of the following is the best example of forward vertical integration?

A car company opening its own dealerships to sell its products directly to customers

________ are a subset of a firm's resources and are defined as tangible and intangible assets that enable a firm to take full advantage of other resources it controls.

Capabilities

________ is/are the distribution of individuals in a society in terms of age, sex, marital status, income, ethnicity, and other personal attributes that may determine buying patterns.

Demographics

____ concentrates on the high end, traditional, and low end segments; it gains competitive advantage with excellent design, high awareness, easy accessibility, and new products.

Differentiation with Product Lifecycle Focus

________ are said to exist when the increase in firm size (measured in terms of volume of production) are associated with lower costs (measured in terms of average costs per unit of production).

Economies of scale

Theories of how to gain competitive advantage in an industry that emerge over time or that have been radically reshaped once they are initially implemented are known as

Emergent Strategies

________ are advantages that come to firms that make important strategic and technological decisions early in the development of an industry

First-mover advantages

Which organizational structure is used to implement a vertical integration strategy?

Functional

________ helps a firm understand which of its resources and capabilities are likely to be sources of competitive advantage.

Internal analysis

________ can help firms be successful in addressing the local needs of nondomestic customers.

Local responsiveness

Which one of the following is an example of the hierarchical governance option for firms pursuing international strategies?

Mergers

________ occurs when partners in an alliance possess high-quality resources and capabilities of significant value in an alliance but fail to make those resources and capabilities available to alliance partners (provide lesser value inputs).

Moral hazard

________ exists when two or more diversified firms simultaneously compete in multiple markets.

Multipoint competition

_____ concentrates primarily on the Traditional and Low end segments of the market; it gains a competitive advantage by keeping R&D costs, production costs and material costs to a minimum, enabling the company to compete on the basis of price.

Niche Cost Leader

____ focuses on the High technology segments (High End, Performance, and Size); it gains competitive advantage by distinguishing products with an excellent design, high awareness, easy accessibility and new products.

Niche Differentiation

________ are specific measurable targets a firm can use to evaluate the extent to which it is realizing its mission.

Objectives

A firm's formal reporting structure, its formal and informal planning and its controlling and coordinating systems are examples of which type of resources?

Organizational resources

Computer hardware and software technology, robots used in manufacturing and automated warehouses are examples of which type of resources?

Physical resources

All other things being equal, which of the following would lead to lower barriers to entry in an industry?

Raw materials are widely and readily available at a competitive price.

________ in the RBV are defined as the tangible and intangible assets that a firm controls that it can use to conceive of and implement its strategies.

Resources

In which type of limited corporate diversification do firms have greater than 95% of their total sales in a single product market?

Single-business firms

Which one of the following is not a determinant of the ability of a firm to learn from its international operations?

The resources for learning

Which one of the following structural options combines a high level of both global integration and local responsiveness?

Transnational structure

A firm engages in a(n) ________ when it purchases a second firm.

acquisition

The most promising opportunity for a firm in a declining industry is to

become a market leader in the pre-shakeout industry

Actions firms take to gain competitive advantages in a single market or industry are known as

business level strategies

Actions that firms take to gain competitive advantage in a single market or industry are known as

business-level strategies.

A firm's marketing skills and teamwork as well as its cooperation among managers are examples of

capabilities

Firms that seek to maximize international integration in their operations will typically opt for ________ structures.

centralized hub

When one firm acquires a(n) ________ of another firm, it has acquired enough of that firm's assets so that the acquiring firm is able to make all the management and strategic decisions in the target firm.

controlling share

In a coordinated federation structure, shared activities and other cross-divisional/cross-country economies of scope (strategic decisions) are managed by the

corporate headquarters.

Actions firms take to gain competitive advantages by operating in multiple markets or industries simultaneously are known as

corporate level strategies

Vertical integration is a type of

corporate strategy.

A firm that chooses a ________ focuses on gaining advantages by reducing its cost below all of its competitors.

cost-leadership business strategy

Firms that seek to maximize their local responsiveness will tend to choose a ________ structure

decentralized federation

As the volume of production in a firm increases, the average cost per unit decreases until some optimal volume of production is reached; after which the average costs of production begin to rise; this rise in costs is the result of

diseconomies of scale.

Firms pursuing ________ have between 70% and 95% of their sales in a single product market.

dominant-business diversification

By conducting a(n) ________, a firm identifies the critical threats and opportunities in its competitive environment

external analysis

The essence of the ________ to vertical integration is that if a firm possesses valuable, rare, and costly-to-imitate resources in a business activity, it should vertically integrate into that activity otherwise it should not vertically integrate into that activity.

firm capability explanation

The advantages that come to firms that make important strategic and technological decisions early in the development of an industry are known as ________ advantages.

first-mover

Industries in which a large number of small or medium-sized firms operate and no small set of firms has dominant market share or creates dominant technologies are called ________ industries.

fragmented

Cost-leadership and product-differentiation strategies are so widely recognized that they are often called

generic business strategies.

When a firm operates in multiple geographic markets simultaneously it is said to be implementing a(n)

geographic market diversification strategy.

Two possible substitutes for strategic alliances include

going it alone and acquisitions.

Acquisitions are an example of the ________ governance option for firms pursuing international strategies.

hierarchical

If eBay were to acquire a smaller online auction company, this would be an example of a ________ merger.

horizontal

A base of differentiation must fill some customer need, such as

image style service safety all of these answers are correct

If firms that do not possess resource or capabilities face a cost disadvantage in obtaining these resources or capabilities compared to the firms that already possess them, these resources and capabilities are termed

imperfectly imitable.

All of the following are elements of the general environment except

industrial trends.

A firm implements a(n) ________ strategy when it diversifies its business operations across country boundaries.

international

In a ________, cooperating firms create a legally independent firm in which they invest and from which they share any profits that are created.

joint venture

A firm has implemented a strategy of ________ when all or most of its activities fall within a single industry and geographic market.

limited corporate diversification

Exporting is a form of

market governance.

When Sears and Kmart, two retail firms of relatively equal size in the United States, agreed to combine their assets, this was an example of a(n)

merger

Firms that have either recently begun operations in an industry or that threaten to begin operations in an industry soon are considered to be ________ in the five forces framework

new entrants

A firm's ________ is defined as its theory about how to gain competitive advantages

none of these answers is correct

Which of the following are the categories comprising the possible bases of differentiation?

product attributes firm-customer relationships firm linkages all of these answers above are correct

In a ________ merger, firms acquire complementary products through their merger and acquisition activities.

product extension

The VRIO assumption that some of the resource and capability differences among firms may be long lasting is known as

resource immobility.

A(n) ________ exists whenever two or more independent organizations cooperate in the development, manufacture, or sale of products or services.

strategic alliance

The sequential set of analyses and choices that can increase the likelihood that a firm will choose a strategy that generates competitive advantages is the

strategic management process

Firms that possess and exploit costly-to-imitate, rare and valuable resources in choosing and implementing their strategies may enjoy a period of

sustained competitive advantage.

A competitive advantage that lasts a very short period of time is known as a ________ competitive advantage.

temporary

If a resource or capability is valuable and rare but not costly to imitate, exploiting this resource will generate a(n)

temporary competitive advantage.

The major opportunity facing firms in fragmented industries is

the implementation of strategies that began to consolidate the industry into a smaller number of firms.

In order for corporate diversification to be economically valuable

there must be some valuable economy of scope among the multiple businesses in which a firm is operating and it must be less costly for managers in a firm to realize these economies of scope than for outside equity holders on their own.

High quality objectives are those that are

tightly connected to elements of a firm's mission

Resources that generate a temporary competitive advantage are

valuable and rare but not costly to imitate.

If an electronics manufacturer were to acquire a chain of retail electronic stores to sell its products, this would be an example of a ________ merger.

vertical

The number of steps in a firm's value chain that it accomplishes within its boundaries describes the firm's level of

vertical integration.