Capstone In Strategic Management - Quiz 5, Capstone In Strategic Management - Quiz 9, Capstone In Strategic Management - Quiz 8, Capstone In Strategic Management - Quiz 7, Capstone In Strategic Management - Quiz 6

A good example of blue-ocean type of offensive strategy is a company like

Australian winemaker Casella Wines that created a Yellow Tail brand designed to appeal to a wider market, one that also includes consumers of other alcoholic beverages.

Which of the following is an example of a multidomestic strategy?

Heinz ketchup in India does not have garlic and onion.

The extent to which a firm's internal activities may encompass one, some, many, or all of the activities that make up an industry's entire value chain system is known as

vertical scope.

When is outsourcing most beneficial?

when internal control over a value chain activity is deemed essential

A focused strategy is considered to be risky under what market circumstance?

when the preferences and needs of niche members shift over time towards the mainstream market

Companies operating in an international marketplace have to respond to all of the following, except

whether to buy a struggling competitor at a bargain price or pay a premium to gain entry to the local market.

Procter & Gamble's acquisition of Gillette was integral to a corporate diversification strategy for building the company around businesses

with strategic fit with respect to key value chain activities and competitive assets.

Self-dealing occurs when managers

take advantage of their position to further their own private interests rather than those of the firm.

Business ethics can be defined as

the application of ethical principles and standards to the actions and decisions of business organizations and the conduct of their personnel.

A best-cost provider's resources and capabilities must allow

the incorporation of upscale attributes into its product offering at a lower cost than rivals.

Coca-Cola's August 2018 move to acquire Costa Coffee, an international coffee chain, meant that the acquired company had to first pass which three Tests of Corporate Advantage?

the industry attractiveness test, the cost-of-entry test, and the better-off (synergy) test

The major risk of employing a focused strategy for a company like Canada Goose is the potential for

the preferences and needs of niche members to shift over time toward product attributes desired by buyers in the mainstream portion of the market.

What does the scope of the firm refer to?

the range of activities the firm performs internally and the breadth of its product offerings, the extent of its geographic market, and its mix of businesses

The global strategy that emphasizes a "think-global, act-global" strategic theme focuses on

the same basic competitive approach (low-cost, differentiation, best-cost, focused) in all countries where the firm does business.

Cross-business strategic fit in a diversified enterprise is not normally achieved when

the value chain activities of unrelated businesses possess economies of scope and good financial fit.

A major advantage of using export strategies to enter international markets is that

these minimize risks and capital requirements.

Strategic offensives should be based on

those areas of strength where the company has its greatest competitive advantage over targeted rivals.

ExxonMobil enters into a pact with Gazprom, the world's largest natural gas extractor, to set up a processing unit in Baku, Azerbaijan. Which of the following is most likely the reason for ExxonMobil to opt for this strategic alliance?

to gain access to low-cost inputs of production

An effective use of cost drivers to support a low-cost generic strategy involves

using lower-cost inputs wherever doing so will not entail too great a sacrifice in quality.

__________ refers to the extent to which a firm engages in the various value chain activities, from initial activities all the way to after-sales activities.

vertical scope

Successful differentiation allows a firm to

command a premium price for its product, increase unit sales, and/or gain buyer loyalty to its brand.

A business should endeavor to be socially responsible in its actions and conduct under what set of circumstances?

(1) increased buyer patronage; (2) reducing the risk of reputation-damaging incidents; (3) pursuing internal benefits such as improved efficiency and workforce retention; (4) shareholder benefits based on apparent correlations between CSR and stock price and other measures of financial performance.

Which statement points out the main difference between the global and the transnational strategy?

A transnational strategy gives local managers more room to make strategy changes to better satisfy local buyers and to better match local market conditions.

You have been hired as a strategic planning consultant to Acre Pizza, a regional chain of outdoor dining pizza restaurants. Acre Pizza is deciding whether or not to outsource home deliveries to third parties such as GrubHub, DoorDash, or UberEats. What would be the biggest drawback of outsourcing this value chain activity?

Acre Pizza farms out the wrong types of activities, loses direct control over deliveries, and thereby hollows out its own capabilities.

Tailoring a company's business model to accommodate the unique local circumstances of developing countries is best exemplified by

Dell's entry into China by deviating from its traditional Internet-based orders to accommodate orders over phone and fax.

How would you characterize Etsy's ability to connect thoughtful consumers with artisans selling unique hand-crafted items online?

Etsy is pursuing an offensive strategy to seek uncharted waters and compete in blue oceans.

In 2020 amidst a global pandemic, Smithfield Foods, one of the nation's largest meat-packing companies, came under public scrutiny for refusing to disclose the number of positive novel coronavirus cases among its employees and for its decision to export large amounts of meat to China while publicly warning about a looming meat shortage in the United States. Smithfield Foods's chief executive, Kenneth Sullivan, responded to critics of the company's actions by saying, "Processing plants were no more designed to operate in a pandemic than hospitals were designed to produce pork. In other words, for better or worse, our plants are what they are. Four walls, engineered design, efficient use of space, etc." How would you characterize Smithfield Foods' ethical strategy?

Its ethical strategy is likely to lead to lower employee morale, higher employee absenteeism, and higher employee cynicism.

Zoom's success in entering the online video conferencing marketplace of rivals such as Skype, WebEx, and GoToMeeting came as the result of which late-mover advantage?

Rapid market evolution (due to fast-paced changes in either technology or buyer needs) gave later followers the opening to leapfrog a first mover's products with more attractive and affordable next-version products.

What is the difference between economies of scale and economies of scope?

Scale refers to cost savings that accrue directly from larger-sized operations, while scope stems directly from strategic fit along the value chains of related businesses.

You have been assigned to research the export strategies of several global companies. Which of the following would you consider to be a good example of a dominant export strategy?

The United States, which is home to the world's three largest producers and suppliers of artificial heart valves.

How would you explain the difference between a one-business company and a diversified company?

The first uses a business-level strategy, while the second uses a set of business strategies and a corporate strategy.

Uber, a mobile ride-sharing on-demand service, offered to purchase Postmates, a mobile food delivery service, for about $2.6 billion in June 2020. What major factor caused Uber to determine whether or not its diversification strategy was timely and likely to be successful?

Uber considered that growth opportunities were limited in ride-sharing at a time when buyer demand was flat or declining while on-demand food delivery market was experiencing rapid growth and consolidation.

The core concept of corporate social responsibility (CSR) can best be expressed as

a company's duty to operate in an honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good steward of the environment, and actively work to better the quality of life in local communities and in society at large.

Which of the following strategic approaches becomes most appealing when a market is not important to industry leaders?

a focused strategy

The difference between a merger and an acquisition is that

a merger is the combining of two or more companies into a single corporate entity, whereas an acquisition involves one company (the acquirer) purchasing and absorbing the operations of another company (the acquired).

The mix of performing an activity internally, as well as outsourcing in any given stage of the vertical chain, refers to which vertical integration strategy?

a tapered integration strategy

Company cultures that spawn an ethically corrupt or amoral work climate encourage

a tendency in employees to ignore "what's right" and engage in any behavior they think they can get away with.

Ethical business strategies and behavior are least likely to be present if there is

confusion over local ethical standards that conflict with those of the company.

A company can best accomplish diversification into new industries by

acquiring a company already operating in the target industry, creating a new business from scratch, or forming a joint venture with one or more companies to enter the target industry.

You are the general manager of a regional HR staffing company. What strategic consideration would be least likely to influence your decision to diversify your firm into new, related or unrelated business services?

analyzing and settling on the appropriate value chain for each business the company has entered

According to the school of ethical universalism, the most important concepts of what is right and what is wrong

are universal and transcend culture, society, and religion.

The three tests for judging whether a particular diversification move can create value for shareholders are the

attractiveness test, the cost of entry test, and the better-off test.

The multidomestic strategy of "think local, act local"

becomes more appealing when country-to-country differences in buyer tastes, cultural traditions, and market conditions vary significantly.

Diversifying into new businesses can be considered a success only if it

builds shareholder value.

Socially responsible strategies that create value for customers and lower costs

can improve profits and shareholder value at the same time that they address other stakeholder concerns.

Strategic alliances are more likely to be long-lasting when they involve

collaboration with suppliers or distribution allies, or when both parties conclude that continued collaboration is in their mutual interests.

A company's environmental sustainability strategy

consists of a company's actions to protect the environment, provide for the longevity of natural resources, and maintain ecological support systems for future generations.

The alliance between Microsoft and immuno-sequencing company Adaptive Biotechnologies can be called "strategic" because it serves all the following strategic purposes except

contracts out certain value chain activities by both parties to outside vendors.

What is the name of the process for developing new businesses as an outgrowth of a company's established business operations?

corporate venturing

Samsung Group's ecosystem of over 1,300 partnerships that enable productive activities, from global procurement to local marketing to collaborative R&D, is considered to have been successful in

creating strategic alliances.

Crafting a strategy to compete in one or more foreign markets can be considered complex because

different government policies and economic conditions make the business climate more favorable in some countries than in others.

Market size and growth rates in different countries can be influenced positively or negatively by

differing population sizes, cultures, income levels, infrastructure, and distribution networks among countries.

CSR strategies that are directed at improving a company's "triple bottom line" focus on what types of performance metrics?

economic, environmental, and social metrics

What are the two ways a company can translate its low-cost advantage over rivals into attractive profit performance?

either using its low-cost edge to underprice competitors and attract price-sensitive buyers in large enough numbers to increase total profits or refraining from price cutting and using the low-cost advantage to earn a bigger profit margin on each unit sold

Vertical integration does not involve

expanding a firm's range of product and service segments within its product or service market.

Strategic fit between two or more businesses exists when one or more activities comprising their respective value chains present opportunities

for cross-business collaboration to build valuable new resource strengths and competitive capabilities.

The primary reasons that companies opt to expand into foreign markets are to

gain access to new customers, achieve lower costs, enhance the company's competitiveness, capitalize on core competencies, and spread business risk across a wider market base.

A major advantage of related diversification is that it

offers ways for a firm to realize 1 + 1 = 3 benefits because the value chains of the different businesses present competitively valuable cross-business relationships.

Cross-border acquisition strategies provide companies with the advantage of

having a high level of control, as well as speed, when entering a market on a large scale.

Achieving a differentiation-based competitive advantage successfully involves

improving customer service or adding additional services.

You have been asked to justify to your top management team several reasons why the exercise of social and environmental responsibility may also be good business for your company. You would say that, "A strong visible social responsibility or environmental sustainability strategy gives our company an edge..."

in appealing to consumers who prefer to do business with companies that are good corporate citizens.

The least obvious and most overlooked route to a differentiation advantage is to

incorporate product attributes that lower the buyer's overall costs of using the company's product.

The concept of blue-ocean strategies refers to

inventing a new market segment that renders existing competitors irrelevant.

The primary objective of deploying a defensive strategy is to

lower the risk of being attacked, weaken the impact of any attack that occurs, and influence challengers to aim their efforts at other rivals.

The main disadvantage of using a franchising strategy to pursue opportunities in foreign markets is

maintaining quality control.

Short-termism involves

managers focusing excessively on short-term performance objectives at the expense of long-term strategic objectives.

A company's corporate social responsibility strategy commonly does not include actions to

maximize returns for shareholders.

Late-mover advantages (or first-mover disadvantages) are not likely to arise when

opportunities exist for a blue-ocean strategy to invent a new industry or distinctive market segment that creates altogether new demand.

The difference between political risks and economic risks is that

political risks stem from instability or weakness in national governments, while economic risks stem from the stability of a country's monetary system, and its economic and regulatory policies.

The better-off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves assessing whether the move will

produce a synergistic outcome such that the company's different businesses perform better together than apart and the whole ends up being greater than the sum of the parts.

Best-cost provider strategies work best when

product differentiation is the norm and there is an attractively large number of value-conscious buyers.

First-mover advantages are most likely to arise when

property rights protections thwart rapid imitation of the initial move.

Horizontal scope refers to the

range of product and service segments that a firm can serve within its focal market.

A focused low-cost strategy based on low cost aims at

securing a competitive advantage by serving buyers in the target market niche at a lower cost than those of rival competitors.

Hilton Hotels has diversified its lodging brands by adding Curio Collection, Tapestry Collection, and Canopy by Hilton, properties that offer stylish, distinctive decors and personalized services that appeal to young professionals seeking distinctive lodging alternatives. Managers can enhance the differentiation of these new brands based on all of the following value drivers except

seeking out low-quality inputs.

The decision to pursue diversification requires management to resolve which industries to enter and whether to enter, and includes such decisions as the following, except

selecting the appropriate value chain operating practices to improve the financial outlook.

Sustainable business practices are those that

serve to meet the needs of the present without compromising the world's ability to meet future needs.