BUS 195 1-5
Capabilities that exhibit causal ambiguity are difficult to imitate.
True
Amazon Prime is credited for helping to increase the Amazon stock price by nearly 300 percent from 2008 to 2010. This competitive advantage is known as _________. A. causal ambiguity B. product rarity C. service validity D. substitutability
A.
One aspect of using a cost leadership strategy is that experience effects may lead to lower costs. Experience effects are achieved by ______. A. repeating a process until a task becomes easier B. hiring more experienced personnel C. spreading out a given expense or investment over a greater volume D. competing in an industry for a long time
A.
The growth stage of the industry life cycle is characterized by A. in-kind competition (from the same type of product) B. premium pricing C. a growing trend to compete on the basis of price D. retaliation by competitors whose customers are stolen
A.
Which of the following is a risk (or potential pitfall) of cost leadership? A. Cost cutting may lead to the loss of desirable features. B. Attempts to stay ahead of the competition may lead to gold plating. C. Cost differences increase as the market matures. D. Producers are more able to withstand increases in supplier costs.
A.
According to Henry Mintzberg, the realized strategies of a firm: A. are a combination of deliberate and emergent strategies B. are a combination of deliberate and differentiation strategies C. must be based on the strategic plan of the company D. must be kept confidential for competitive reasons
A. are a combination of deliberate and emergent strategies
SWOT analysis is a framework for analyzing the internal and external environment of a company. It consists of strengths, weaknesses, opportunities, and threats. According to a SWOT analysis, which of the following is not an aspect that the strategy of the firm must follow? A. build on its weaknesses B. remedy the weakness or work around them C. take advantage of the opportunities presented by the environment D. protect the firm from the threats
A. build on its weaknesses
Gathering competitive intelligence____________. A. is good business practice B. is illegal C. is considered unethical D. minimizes the need to obtain information in the public domain
A. is good business practice
Which of the following would be an entry barrier? A. large economies of scale B. low switching costs C. easy access to raw materials D. low capital requirements
A. large economies of scale
The threat of new entrants is high when there are__________. A. low economies of scale B. high capital requirements C. high switching costs D. high differentiation among competitors products and services
A. low economies of scale
The vision and mission statements of a company set the overall direction of the organization. Strategic objectives serve what role? A. operationalize the mission statement B. modify the mission statement C. are a shorter version of the mission statement D. are only clarified by the board of directors
A. operationalize the mission statement
The four key attributes of strategic management include the idea that: A. strategy must be directed toward overall organizational goals and objectives B. strategy must be focused on long-term objectives C. strategy must be focused on one specific area of an organization D. strategy must focus on competitor strengths
A. strategy must be directed toward overall organizational goals and objectives
Firms must be aware of goals other than short-term profit maximization. One area of concern should be social responsibility which is: A. the expectation that business will strive to improve the overall welfare of society B. the idea that organization are solely responsible to local citizens C. the fact that court costs could impact the financial bottom line D. the idea that businesses are responsible to maintain a healthy social climate for their employees
A. the expectation that business will strive to improve the overall welfare of society
Effectiveness is often defined as: A. doing things right B. stakeholder satisfaction C. doing the right thing D. productivity enhancement
C. doing the right thing
A _________ can be defined as total profits in an industry at all points along the industry value chain. A. profit maximizer B. profit pool C. revenue enhancer D. profit outsourcing
B.
A marketing department that promises delivery faster than the ability of the production department to produce is an example of a lack of understanding of the ________. A. organizational culture and leadership B. interrelationships among functional areas and firm strategies C. need to maintain the reputation of the company D. synergy of the business units
B.
A narrow market focus is to a differentiation-based strategy as a _____________. A. growth market is to a differentiation-based strategy B. broadly-defined target market is to a cost leadership strategy C. growth market is to a cost-based strategy D. technological innovation is to a cost-based strategy
B.
All of the following are examples of socially complex organizational phenomena EXCEPT: A. a firm's culture B. complex physical technology C. interpersonal relations among a firms managers D. leadership and trust
B.
Although general administration is often viewed only as overhead expense, it can become a source of competitive advantage. Examples include all of the following EXCEPT: A. negotiations and maintaining ongoing relations with regulatory bodies B. marketing expertise increasing the revenues of the firm and enabling it to enter new markets C. effective information systems contributing significantly to overall cost leadership strategy for the firm D. top management providing a key role in collaborating with important customers
B.
Creativity and problem solving ability are considered to be part of ____________. A. physical capital B. human capital C. social capital D. emotional captial
B.
Dynamic capabilities include all of the following EXCEPT _________. A. learning and innovating B. becoming more efficient in operational processes C. the ability of an organization to challenge the conventional industry in its industry and market D. continuously adopting new ways of serving the evolving needs of the market
B.
Human resource management consists of activities involved in the recruiting, hiring, training, development, and compensation of all types of personnel. It supports ________. A. only individual primary activities B. both individual primary and support activities and the entire value chain C. only individual support activities D. mostly support activities but does have some impact on primary activities
B.
In a 360-degree evaluation and feedback system, which of these do not rate the skills and performance of an individual? A. superiors B. family C. direct reports D. colleagues
B.
In social network analysis, the importance of ties connecting heterogeneous people that help to ensure a wide range of diversity in information and perspective is known as ____________. A. closure B. bridging relationships C. redundancy D. social supports
B.
In the knowledge economy, if a large portion of company value is in intellectual and human assets, the difference between the market value and book value of the company should ____________ a company with mostly physical and financial assets. A. be equal to B. be larger than C. be smaller than D. not be correlated with
B.
In the resource-based view of the firm, example of tangible resources include: A. financial resources, human resources, and firm competencies B. financial resources, physical resources, and technological resources C. financial resources, physical resources, and the capacity to combine intangible resources D. outstanding customer service, innovativeness of products, and reputation
B.
Managing a knowledge intensive workforce is very challenging. The best way for a firm to manage its workforce is to ______________. A. retain knowledge workers B. balance efforts in the attraction, selection, and retention of top talent C. attract the brightest employees D. ensure that it pays higher salaries than its rivals
B.
Mary Stinson was required to take over a project after the entire team left the company. She was able to reconstruct what the team had accomplished through reading e-mails exchanged by the members of the team. This is an example of _________. A. inefficient use of information management B. using explicit knowledge C. using tacit knowledge D. using replicated knowledge
B.
One of the main reasons the Internet is eroding sustainable competitive advantages is that _________. A. incumbent firms are entering market segments that they previously considered to be too small B. nearly all competitors will have greater access to tools for managing costs C. differentiators have been able to preserve their unique advantages D. firms are ignoring opportunities to offer high-end services in niche markets
B.
Research shows that which of the following is not a strategy used by firms engaged in successful turnarounds? A. asset and cost surgery B. global expansion C. selective product and market pruning D. piecemeal productivity improvements
B.
Support value chain activities that involve excellent applications engineering support (technology development) and facilities that promote a positive firm image (firm infrastructure) characterize what generic strategy? A. overall cost leadership B. differentiation C. differentiation focus D. stuck-in-the-middle
B.
Tacit knowledge ________________. A. is the same as explicit knowledge B. can be accessed only with the consent of the employees C. is found mostly at the lower levels of the organization D. can be codified but not reproduced
B.
The best measure of a company's ability to meet imminent financial obligations is know as the A. debt ratio B. current ratio C. total asset turnover D. profit margin
B.
The use of information technology (e.g., e-mail) has increased in recent years in many organizations. This has helped to __________. A. make more effective use of time in every situation B. communicate information efficiently C. restrict social network growth D. create smaller social networks
B.
Which of the following is NOT a limitation of SWOT analysis? A. Organization strengths may not lead to competitive advantage. B. The SWOT focus on the external environment is too broad and integrative. C. SWOT gives a one-shot view of a moving target. D. SWOT overemphasized a single dimension of strategy.
B.
Which of the following is a support activity? A. inbound logistics B. technology development C. operations D. customer service
B.
Which of the following is most often true of mature markets? A. Some competitors enjoy a significant operating advantage due to increasing experience effects. B. Advantages that cannot be duplicated by other competitors are difficult to achieve. C. The market supports premium pricing, which attracts additional competitors. D. The magnitude of pricing differences and product differentiation is larger than in the growth stage.
B.
Which of the following is not a potential pitfall of a differentiation strategy? A. Uniqueness that is not valuable. B. All rivals share a common input or raw material. C. The price premium is too high. D. Perception of differentiation may vary between buyers and sellers.
B.
______ is/are associated with collecting, storing, and distributing the product or service to buyers. They consist of warehousing, material handling, delivery operation, order processing, and scheduling. A. Services B. Outbound logistics C. Inbound logistics D. Operations
B.
Which of the following firms would you expect to have the highest ratio of market value to book value? A. Apple B. Google C. Southwest Airlines D. Nucor (steel)
B. A?
________ tracks the evolution of environmental trends, sequences of events, or streams of activities. A. Environmental scanning B. Environmental monitoring C. Environmental surveying D. Competitive intelligence
B. Environmental monitoring
Perter Senge, of MIT, recognized three types of leaders. _________ champion and guide ideas, create a learning infrastructure, and establish a domain for taking action. A. Local line leaders B. Executive leaders C. Internal networkers D. Shop floor leaders
B. Executive leaders
A CEO made a lot of mistakes in assessing the market and the competitive conditions and improperly redesigning the organization into numerous business units. Such errors led to significant performance declines. According to text, this example illustrates the _________ perspective of leadership. A. external control B. romantic C. internal mechanism D. operational
B. Romantic
Which of the following statements about strategic groups is FALSE? A. Two assumption are made: (1) no two firms are totally different, (2) no two firms are exactly the same. B. Strategic groups are of little help to a firm in assessing mobility barriers that protect a group from attach by other groups. C. Strategic groups that help chart the future direction of firm strategies. D. Strategic groups are helpful in thinking through the implications of each industry trend for the group as a whole.
B. Strategic groupings are of little help to a firm in assessing mobility barriers that protect a group from attacks by other groups.
Effective vision statements include: A. all strategic directions of the organization B. a brief statement of the company's direction C. strategic posturing and future objectives D. financial objectives and projected figures
B. a brief statement of the company's direction
Members of the boards of directors are: A. appointed by the Securities and Exchange Commission B. elected by the shareholders as their representatives C. elected by the public D. only allowed to serve one term for four years
B. elected by the shareholders as their representatives
Fortune Brands states they will cut corporate overhead costs by $30 million a year. This is an example of a: A. non financial strategic objective B. financial strategic objective C. vision statement D. mission statement
B. financial strategic objective
Many organizations have a large number of functional areas with very diverse and sometimes competing interests. Such organizations will be most effective if: A. each functional area focuses on achieving their own goals B. functional areas work together to attain overall goals C. goals are defines at the bottom and implemented at the top D. management and employees have separate goals
B. functional areas work together to attain overall goals
Stakeholders are: A. a new way to describe stockholders B. individuals, groups, and organizations who have a stake in the success of the organization C. creditors who hold a lien on the assets of the organization D. attorneys and their client who sue the organization
B. individuals, groups, and organizations who have a stake in the success of the organization
Interest-rate increases have a _________ impact on the residential home construction industry and a __________ effect on industries that produce consumer necessities such as prescription drugs or basic grocery items. A. positive; negligible B. negative; negligible C. negative; positive D. positive; negative
B. negative; negligible
Supplier power has increased because of the Internet for all of the following reasons EXCEPT: A. the growth of new Web-based businesses has created more outlets for suppliers to sell to B. some suppliers have created Web-based purchasing systems that encourage switching C. the process of disintermediation makes it possible for some suppliers to reach end users directly D. software that links buyers to a supplier's website has created rapid, low-cost order capabilities
B. some suppliers have created Web-based purchasing systems that encourage switching
Scanning the general environment would identify information on __________. A. substitute goods B. the aging population and ethnic shifts C. customer and firm bargaining power D. competitive rivalry
B. the aging population and ethnic shifts
A supplier group would be most powerful when __________. A. there are many suppliers B. there are few substitute products C. there is a low differentiation of products supplied D. there is a high threat of backward integration by the buyers
B. there are few substitute products
WellPoint Health Network states: WellPoint will redefine our industry: through a new generation of consumer-friendly products that put individual back in control of their future. This is an example of a: A. strategic objective B. vision statement C. vague statement of direction D. line manager's individual goal
B. vision statement
Advantages of effective social networks for career success include all of the following EXCEPT __________. A. access to private information B. access to diverse skill sets C. greater redundancy in knowledge sources D. greater power
C.
All of the following are the benefits of diversity in the workforce of a firm except: A. creativity argument B. problem-solving argument C. similarity in perspectives arguments D. resource acquisition argument
C.
Apple combines and packages proven technology in new and innovative ways. This is an example of its use of _______. A. tangible resources B. intangible resources C. organizational capabilities D. strong primary activities
C.
A crash R&D program by one firm cannot replicate a successful technology developed by another firm, when research findings cumulate. This is an example of _________. A. social complexity B. physical uniqueness C. path dependency D. causal ambiguity
C.
As a competitive environment changes, strategic management must focus on different aspects of the organization. Recently, strategic management has moved form focusing on tangible resources to __________. A. fixed capital B. working capital C. intangible resources D. investment capital
C.
As markets mature, ___________. A. costs continue to increase B. application for patents increase C. there is increasing emphasis on efficiency D. differentiation opportunities increase
C.
Developing human capital is essential to maintaining a competitive advantage in the current knowledge economy. Efforts and initiatives to develop human capital should be directed _____. A. at top managers B. at human resource departments C. throughout the firm at all levels D. at the employees themselves
C.
Employees will be able to obtain a proportionately high level of profits they generate (relative to the firm) if _________. A. suppliers are loyal to the firm B. their expertise is firm-specific C. the cost to the firm of replacing them is high D. the firm's resources are path dependent
C.
For a resource to provide a firm with the potential for a sustainable competitive advantage, it must have four attributes. Which of the following is not one of these attributes? A. rare B. valuable C. easy for competitors to substitute D. difficult for competitors to imitate
C.
Generally, employees are most likely to stay with an organization if _____________. A. the employer provides high salaries to technology professionals B. the firm is in a high tech industry C. the organization mission and values align with the employees mission and values D. the mission and values of the organization change often
C.
In a given market, key technology no longer has patent protection, experience is not an advantage, and there is growing need to compete on price. What state of its life cycle is the market in? A. introduction B. growth C. maturity D. decline
C.
In an effort to capture key employees from competitors, firms may attract the symbolic leader of a group within a competing firm and hope others will follow. This has been termed ______. A. the Columbus effect B. knowledge integration C. the Pied Piper effect D. strategically competitive hiring
C.
In order to take advantage of investment in human capital, a firm should _________. A. rotate workers through functions in the company as quickly as possible B. refrain from training individual employees C. establish practices that will enhance employees retention D. keep employees in the same position forever
C.
Inbound logistics include: A. machining and packaging B. repair and parts supply C. warehousing and inventory control D. promotion and packaging
C.
Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize what generic strategy? A. differentiation B. differentiation focus C. overall cost leadership D. stuck-in-the-middle
C.
Research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform _____________. A. at about the same level as firms that achieve either cost or differentiation advantages B. about the same as firms that are stuck-in-the-middle C. higher than firms that achieve either a cost or a differentiation strategy D. lower than firms that achieve differentiation advantages but higher than firms that achieve cost advantages
C.
Social capital has many potential benefits. However, according to the text, social capital ___________. A. is always beneficial to a firm B. usually restricts the productivity of employees C. may or may not be beneficial to a firm D. always hurts firm performance
C.
Social capital is source of strength to many firms. Firms leverage their social capital in an effort to create competitive advantages. The social capital of a firm is based on __________. A. the individual abilities of employees B. the allocation of the financial resources of the firm C. the relationships among the employees of the firm D. the knowledge of an individual
C.
The balanced scorecard provides top managers with a ______ view of the business. A. detailed and complex B. simple and routine C. fast but comprehensive D. long-term financial
C.
The most likely time to pursue a harvest strategy is in a situation of _____________. A. high growth B. strong competitive advantage C. decline in the market life cycle D. mergers and acquisitions
C.
The resource-based view (RBV) of the firm combines two perspectives: A. the primary and support activities of the firm B. the interrelationships among the primary activities of the firm and corporate management C. the internal analysis of the firm and the external analysis of the industry and competitive environment D. the industry and the competitive environment
C.
Today, the loyalty of a knowledge worker to his or her employing firm has _________ compared to his or her loyalty to his or her profession and colleagues. A. increased B. remained the same C. decreased D. no correlation when
C.
Which of the following is FALSE regarding how a differentiation strategy can help a firm to improve its competitive position relative to the Porter five forces model? A. By increasing firm margins, it avoids the need for a low cost position. B. It reduces buyer power because buyers lack comparable alternatives. C. Supplier power is increased, because suppliers will be able to charge higher prices for their inputs. D. Firms will enjoy high customer loyalty.
C.
Which of the following is NOT one of the ways the Internet is lowering transaction costs? A. eliminating supply chain intermediaries B. minimizing office expenses C. evaluating employee performance D. reducing business travel
C.
Which of the following is not a potential pitfall of a focus strategy? A. Erosion of cost advantages can arise within the narrow segment. B. Product/service offerings that are highly focused are subject to competition from new entrants. C. All rivals share a common input or raw material. D. Focusers can become too focused to satisfy buyer needs.
C.
Which of the following is not an advantage of Just-In-Time inventory systems? A. reduced raw material storage costs B. minimized idle production facilities and workers C. reduced dependence on suppliers D. reduced work-in-process inventories
C.
Which of the following methods of implementing a differentiation strategy has been greatly enhanced because of Internet technologies? A. celebrity endorsements B. prestige packaging C. mass customization D. exceptional service
C.
____________ may be considered the advance work that must be done in order to effectively formulate and implement strategies. A. Goal setting B. Corporate entrepreneurship C. Strategy analysis D. Organizational design
C. Strategy analysis
How do infomediaries and consumer information websites increase the intensity of competitive rivalry? A. by shifting customers away from issues of price B. by making competitors in cyberspace seem less equally balances C. by consolidation the marketing message that consumers use to make a purchase decision to a few key pieces of information that the selling company has little control over D. by highlighting unique selling advantages of a firm
C. by consolidating the marketing message that consumers use to make a purchase decision to a few key pieces of information that the selling company has little control over
In the value net analysis, complementors are _________. A. firms that produce substitute products B. customers who compliment the company for their good products and services C. firms that produce products or services that have a positive impact on the value of firm products or services D. firms that supply critical inputs to a company
C. firms that produce products or services that have a positive impact on the value of firm products or services
Firms would be most likely to face intense rivalry with competitors when they _________. A. are in a high growth industry with low fixed costs B. are in a protected market C. have high fixed costs D. have low exit barriers for easy transition to another industry
C. have high fixed costs
In large organizations, conflicts can arise between functional areas. In order to resolve these conflicts, strategic objectives: A. put financial objectives above human considerations B. align departments toward departmental goals C. help resolve conflicts through their common purpose D. cause debate and increase conflict
C. help resolve conflicts through their common purpose
A danger of forecasting discussed in the test is that ___________. A. in most cases, the expense of collecting the necessary data exceeds the benefit B. the retrospective nature of forecasting provides little information about the future C. managers may view uncertainty as black and white while ignoring important gray areas D. it can create legal problem for the firm if regulators discover the company is making forecasts
C. managers may view uncertainty as black and white while ignoring important gray areas
There are several perspectives of competition. One perspective is zero-sum thinking. Zero-sum thinking means that: A. all parts of the organization gain at no loss B. in order for someone to gain others must experience no gain or benefit C. one can only gain at the expense of someone else D. everyone in the organization shares gains and losses equally
C. one can only gain at the expense of someone else
Which is considered a force in the Five-Forces model? A. increased deregulation in an industry B. the threat of government intervention C. rivalry among competing firms D. recent technological innovation
C. rivalry among competing firms
Larger numbers of women entering the workforce since the early 1970s is an example of _________. A. demographic changes B. political and legal environmental changes C. sociocultural changes D. technological developments
C. sociocultural changes
All of the following are important elements of the political/legal segment of the general environment EXCEPT: A. the deregulation of utilities B. the Americans with Disabilities Act (ADA) C. the increases us of Interest technology D. increases in the federally mandated minimum wage
C. the increased use of Internet technology
The three participants in corporate governance are: A. the shareholders, board of directors, and employees B. the shareholders, labor unions, and employees C. the shareholders, board of directors, and management D. the shareholders, banks and lending institutions, and management
C. the shareholders, board of directors, and management
The text argues that a strategic perspective in an organization should be emphasized: A. at the top of the organization B. at the middle of the organization C. throughout the organization D. from the bottom up
C. throughout the organization
The hierarchy of organizational goals is in this order (least specific to most specific): A. vision statements, strategic objectives, mission statements B. mission statements, strategic objectives, vision statements C. vision statements, mission statements, strategic objectives D. mission statements, vision statements, strategic objectives
C. vision statements, mission statements, strategic objectives
The balanced scorecard enables managers to consider their business from all of the following perspectives EXCEPT: A. customer perspective B. internal perspective C. innovation and learning perspective D. ethical perspective
D.
Which of the following is not a reason for the possible erosion of company competitive advantage? A. rapid change in technology B. globalization C. actions by rivals from within and outside of the industry D. company commitment to innovation
D.
Advertising is a ________ activity. Supply of replacement parts is a _______ activity. A. support; primary B. support; secondary C. primary; support D. primary; primary
D.
Many companies use referrals by current employees as a source for new hiring and even monetarily reward them because ___________________. A. it is less expensive than the fees paid to headhunters B. current employees normally are careful in recommending someone due to their personal credibility C. it is a good test of employee loyalty D. current employees are careful in their recommendations and it is less expensive than the fees paid to the headhunters
D.
Which of the following is not a reason of the successful turnaround that Ford experienced in 2011 under CEO Mulally? A. downsizing through the sale of non-Ford brands B. focus on a narrower range of cars C. tightening of the product design across brands D. increasing its manpower across the company
D.
Which of the following statements about the introduction stage of the market life cycle is TRUE? A. It produces relatively large, positive cash flows. B. Strong brand recognition seldom serves as an important switching cost. C. Market share gains by pioneers are usually easily sustained for many years. D. Products or services offered by pioneers may be perceived as differentiated because they are new.
D.
Which of these categories of financial ratios is used to measure the ability of a firm to meet its short-term financial obligations? A. leverage ratios B. profitability ratios C. activity ratios D. liquidity ratios
D.
The bargaining power of suppliers is enhanced under the following market condition: A. no threat of forward integration B. low differentiation of the supplier products C. greater availability of substitute products D. dominance by a few suppliers
D. dominance by a few suppliers
Management innovations such as total quality, benchmarking, and business process reengineering cannot lead to sustainable competitive advantage because: A. companies that have implemented these techniques have lost money B. there is no proof that these techniques work C. they cost too much money and effort to implement D. every company is trying to implement them and hence it does not make the company different from others
D. every company is trying to implement them and hence it does not make the company different from others.
Exit barriers do not arise from ___________. A. specialized assets with no alternative use B. governmental and social pressures C. strategic interrelationships with other business units within the same company D. flexible costs of exit
D. flexible costs of exit
The bargaining power of the buyer is greater than that of the supplier when ___________. A. volume of purchase is low B. threat of backward integration by buyers is low C. cost savings from the supplier's product are minimal D. the buyer's profit margin is low
D. the buyer's profit margin is low
End users are not ___________. A. the final consumers in a distribution channel B. usually the C in B2C C. likely to have greater bargaining power because of the Internet D. the first customers in a distribution channel
D. the first customers in a distribution channel
The bargaining power of suppliers increases as _________. A. more suppliers enter the market. B. importance of buyers to supplier group increases C. switching costs for buyers decrease D. threat of forward integration by suppliers increases
D. threat of forward integration by suppliers increases
360-degree evaluation systems are not useful due to the need to integrate large amounts of feedback.
False
A cost leadership strategy is not susceptible to the risk of reduced flexibility.
False
A disadvantage of firms that successfully integrate overall cost leadership and a differentiation strategy is that they are relatively easy for competitors to imitate.
False
A firm striving for cost leadership will typically spend relatively more on product related R&D than on process related R&D.
False
A hard trend is something that might happened and for which the probability that it might happen can be estimated
False
A successful differentiation strategy lowers entry barriers because of customer loyalty and the ability of the firm to provide uniqueness in its products and services.
False
According to the textbook, strategic management does not consist of the analyses that an organization undertakes in order to create and sustain competitive advantages.
False
Although changes in the general environments may often adversely or favorably impact a firm, they seldom alter an entire industry.
False
Campbell Soup uses an electronic network to facilitate its continuous-replenishment program with its most progressive retailers. This is known as an operation primary activity in the value chain.
False
Competitive advantage is not affected by actions by rivals from within and outside of the industry.
False
Competitive intelligence generally does not benefit very much from gathering information on competitors from sources in the public domain.
False
Complement products typically have no impact on the value of products and services of the firm.
False
Corporate-level strategy addresses how firms compete and outperform their rivals as well as achieve and sustain competitive advantages.
False
During the decline stage of the product life cycle, a harvesting strategy means that a firm keeps a product going without significantly reducing marketing support, technological development, or other investments, while hoping that competitors will exit the market.
False
During the growth stage of the market life cycle, customers are very likely to establish brand loyalty.
False
Financial analysis provides an accurate way to assess the relative strengths of firms and can be used as a complete guide to study companies.
False
Firms that are successful in crating competitive advantages that are sustainable for a period of time do not have to be concerned about profits being retained by employees or managers.
False
Focus, by itself, often constitutes a competitive advantage.
False
Former Chrysler vice chairman Robert Lutz observed that companies exist to serve the shareholder and create shareholder value. He insisted that the only person who owns the company is the person who paid good money for it. This is an example of a symbiotic approach to stakeholder management.
False
Historical comparisons are most appropriate during periods of recession or economic boom.
False
If a firm has a successful differentiation strategy, it is necessary to attain parity on cost.
False
In bridging relationships in social networks, one member is central to the communication flows in a group.
False
In most effective evaluation and reward systems employees can only receive evaluation and feedback from their immediate supervisor.
False
Inbound logistics include all activities associated with transforming inputs into the final product form such as machining, packaging, assembly, equipment, testing, printing, and facility operations.
False
Intellectual property rights are easier to define and protect than property rights for physical assets (e.g., plant and equipment).
False
Knowledge workers are more loyal to their companies than traditional workers.
False
Manager should focus their attention on interrelationships among value-chain activities within the firm, NOT on relationships among activities within the firm and other organizations (such as suppliers and customers).
False
Organizational goals and objectives should be vague in order to allow for changes in strategy.
False
Reintermediation is responsible for an overall reduction in business opportunities.
False
Rivalry is most intense when there are high exit barriers and high industry growth.
False
Scenario planning is usually concerned with short-term forecasts.
False
Since electronic teams (e-teams) seldom meet face-to-face, it is NOT important for them to be concerned with how to combine individual contributions effectively.
False
Social capital is found in the knowledge, skills, and abilities of individual employees.
False
Strategic objectives should be measurable, specific, appropriate, and realistic, but not constrained by time deadlines.
False
Switching costs for an end user are likely to be much higher because of the Internet.
False
The Internet has provided a small subset of companies with greater tools for managing costs.
False
The SWOT analysis can show manager how to achieve a competitive advantage.
False
The concept of shared value redefines the purpose of the corporation as creating shared value in order to create a more even distribution of the profits to all employees, not just top level executives.
False
The difference between the market value and book value of a firm is its social capital.
False
The importance of human capital has decreased in recent years. For this reason, many firms have placed greater attention on attracting talent, but not on developing or retaining it.
False
The market life cycle should be used as a short-run forecasting device because it provides a conceptual framework for understanding what changes typically occur.
False
The opportunities and threats of a SWOT analysis refer to the internal conditions of the firm.
False
The role of technology in the recruitment of human capital has lowered individual reliance on the use of social networks.
False
The strategic groups in the worldwide automobile industry have been very stable and unchanging in recent years.
False
The strategic management process should be addressed only by top-level executives. Mid-level and low-level employees are best equipped to implement the strategies of the organization.
False
The three generic strategies that Michael Porter believes a firm can use to overcome the five forces and achieve competitive advantage include overall price leadership.
False
The three primary participants in corporate governance are: (1) the shareholders, (2) the management (led by the CEO), and (3) the employees.
False
There is generally a weak relationship between equity markets (e.g., New York Stock Exchange) and economic indicators.
False
Value-chain analysis can only be applied to manufacturing operations.
False
With reverse positioning, a strategy to be used during the mature stage of the industry life cycle, a product escapes its category by deliberately associating with a different one.
False
Workforces that reflect demographic changes will become more homogeneous over the next few decades with regard to gender, race, ethnicity, and nationality.
False
A firm can attain an overall cost leadership position by using automated technology to reduce scrappage rates.
True
A major sociocultural trend in the United States is the increased educational attainment by women.
True
A mission statement encompasses both the purpose of the organization as well as its basis of competition and the basis of its competitive advantage.
True
A primary benefit of the balanced scorecard is that it complements financial indicators with operational measures of customer satisfaction, internal processes, and the innovation and improvement activities of the organization.
True
According to the text, effective e-teams identify group members with a proper balance of technical and interpersonal skills.
True
According to the text, formulating strategy includes taking into consideration strategy at the business, corporate, and international levels.
True
Amazon Prime is an example of a difficult to imitate capability that gives it competitive advantage over its rivals.
True
An important implication of the balanced scorecard is that managers need NOT look at their job as primarily balancing stakeholder demands.
True
An important potential pitfall of an integrated overall cost leadership and differentiation strategy is that firms may fail to implement either one and become stuck-in-the-middle.
True
An internal work opportunity market for employees is one means of increasing employee retention.
True
As markets mature, competition on the basis of differentiation is preferable to price competition.
True
Buyer power tends to be higher if suppliers provide undifferentiated or standard products.
True
Crowdsourcing is used by companies to develop products.
True
Environmental monitoring deals with tracking changes in environmental trends that are often uncovered during the environmental scanning process.
True
Establishing a customer service hotline to handle customer complaints would be considered a primary activity in value-chain analysis.
True
Firms such as Apple and Google will tend to have a higher ratio of market value to book value than industrial companies such as Nucor Steel.
True
Five-Forces analysis implicitly assumes a zero-sum game, a perspective that can be short-sighted.
True
From the individual perspective, social networks deliver three unique advantages: private information, access to diverse skill sets, and power.
True
In considering the business from the innovation and learning perspective using the balanced scorecard, the ability of the firm to do well is more dependent on its intangible and tangible assets.
True
In considering the business from the internal business perspective using the balanced scorecard, customer-based measures must be translated into indicators of what the firm must do internally to meet customer expectations.
True
In most industries, new entrants will be a bigger threat because the Internet lowers entry barriers.
True
In value-chain analysis, finance and accounting are considered part of the general administration of a firm.
True
Industries characterized by high economies of scale typically attract fewer new entrants.
True
Many firms facing a turnaround situation try to reduce their costs by outsourcing the production of many inputs.
True
Mass customization enables manufacturers to be more responsive to customer demands for high quality products.
True
Objectives in organizations should be clear, stated, and known by employees throughout the organization.
True
One of the most important elements in a good employee is his or her attitude. Firms should follow the adage: hire for attitude, train for skill.
True
One way the Internet and digital technologies are creating opportunities for firms with differentiation strategies is by enabling mass customization.
True
Primary activities contribute to the physical creation a product or service, its sale and transfer to the buyer, and its service after the sale.
True
Procter and Gamble developed a laundry detergent compaction technique that appeals to consumers, retailers, shipping and wholesalers, and environmentalists. This is an example of stakeholder symbiosis.
True
Products and services that are difficult to imitate help firms sustain their profitability.
True
Social network analysis can be used to help identify groups or clusters of individuals that comprise the networked, individuals who belong to the clusters, and other network members.
True
Stockholders, employees, and the community-at-large are among the stakeholders of a firm.
True
Strategic management consists of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages.
True
Strategic management recognizes the trade-offs between effectiveness and efficiency.
True
Strategic objectives are more specific than vision statements.
True
Tangible resources are assets that are relatively easy to identify such as financial and physical assets.
True
The French automobile maker, Renault, attains competitive advantage by revamping cars to be more cost efficient.
True
The Millennial generation expects employers to provide incentives to attract and retain them. A company that does this will have a competitive advantage.
True
The aging of the population is a hard trend.
True
The experience curve concept suggests that production costs tend to decrease as production increases.
True
The five-forces model helps to determine both the nature of competition in an industry and the profit potential for the industry.
True
The power of suppliers will be enhanced if they are able to maintain a credible threat of forward integration.
True
The same environmental trend or event may have a very different impact on different strategic groups within the same industry.
True
The software maker, Intuit, successfully implemented a turnaround strategy by discounting product lines and focusing all resources on a few core profitable areas.
True
Too much focus on one or a few value-chain activities can be a pitfall of the overall cost leadership strategy.
True
Toyota paid a heavy price for its excessive emphasis on cost control. By focusing on only one strength exclusively, it suffered sever losses. This is an example of the limitations of a SWOT analysis.
True
Value-chain analysis assumes that the basic economic purpose of a firm is to create value and it is a useful framework for analyzing the strengths and weaknesses of the firm.
True