exam 2 bus 498

54.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. Cost cutting may lead to the loss of desirable features.

87. The difference between a franchise contract and a licensing contract is that ___________. A. a franchise contract is more specific and usually longer in duration B. a franchise contract must include a foreign government C. a licensing contract covers more aspects of operations D. a franchise contract involves less control and less risk

A. a franchise contract is more specific and usually longer in duration

59. Casio, a giant electronic products producer, synthesizes it abilities in miniaturization, microprocessor design, material science, and ultrathin precision castings to produce digital watches. It uses the same skills to produce card calculators, digital cameras, and other small electronics. These collective skills are known as _________________. A. core competencies B. strategic resources C. shared activities D. economies of scope

A. core competencies

70. Recent trends that might lead managers of multinational corporations (MNCs) to adopt a more decentralized strategy for their operations would include all of the following EXCEPT ______. A. customer needs, interests, and tastes becoming increasingly homogenized B. consumers around the world increasingly willing to tradeoff idiosyncratic preferences in product features for lower price C. flexible manufacturing trends allowing a decline in the minimum volume required to reach acceptable levels of production efficiency D. fluctuating exchange rates

A. customer needs, interests, and tastes becoming increasingly homogenized

54.Corporate-level strategy focuses on _____________. A. gaining long-term revenue B.gaining short-term profits C. decreasing business locations D. managing investment bankers and their interests

A. gaining long-term revenue.

63. When firms expand into global markets, they are faced with the choice of reducing costs and/or adapting to the local market. When high pressures exist to lower costs, companies should choose a __________ or __________ in order to compete in the global marketplace. A. global strategy; transnational strategy B. global strategy: multidomestic strategy C. international strategy; multidomestic strategy D. international strategy; transnational strategy

A. global strategy; transnational STRATEGY

78.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 stole

A. in-kind competition (from the same type of product

81. Which of the following is a reason for the rise in regional expansion? A. increase in the number of trading blocs and free trade zones B. decrease in the number of trading blocs and free trade zones C. increasing national trade restrictions D. increasing local taxes and tariffs

A. increase in the number of trading blocs and free trade zones

65. Which would be the appropriate strategy for companies to use to compete in the global marketplace if the marketplace pressure is for lower costs with little pressure for local adaptation? A. international strategy B. global strategy C. multidomestic strategy D. transnational strategy

A. international strategy

51. Multinational firms are constantly faced with the dilemma of choosing between _______ and __________. A. local adaptation; global integration B. local adaptation; local integration C. global adaptation; local integration D. global adaptation; global integration

A. local adaptation; global

50. 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. repeating a process until a task becomes easier.

Sharing core competencies is one of the primary potential advantages of diversification. In order for diversification to be most successful, it is important that _____________. A. the similarity required for sharing core competencies must be in the value chain, not in the product B. the products use similar distribution channels C. the target market is the same, even if the products are very different D. the methods of production are the same

A. the similarity required for sharing core competencies must be in the value chain, not in the product

67. Software Tech, Inc., a company in the computer software industry, invests heavily in Research and Development, and product design. Thus, most of its value is added ________. A. upstream B. in its infrastructure C. downstream D. midstream

A. upstream

56.McKesson, a large distribution company, sells many product lines such as pharmaceuticals and liquor through its super warehouses. This is an example of ____________. A. using related diversification to achieve value by sharing activities to create economies of scope B. using related diversification to achieve value by leveraging core competencies to create market power C. using unrelated diversification to create value by managing its portfolio to create financial synergies D. using unrelated diversification to create value by managing its portfolio to create restructuring advantages

A. using related diversification to achieve value by sharing activities to create economies of scope

84.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. Advantages that cannot be duplicated by other competitors are difficult to achieve.

60.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. Perceptions of differentiation may vary between buyers and sellers.

B. All rivals share a common input or raw material.

86. Which of the following statements regarding internal development as a means of diversification is FALSE? A. Many companies use internal development to extend their product or service offers. B. An advantage of internal development is that it is generally faster than other means of diversification and firms can benefit from speed in developing new products and services. C. The firm is able to capture wealth created without having to share the wealth with alliance partners. D. Firms can often develop products or services at a lower cost, if they rely on their own resources instead of external funding.

B. An advantage of internal development is that it is generally faster than other means of diversification and firms can benefit from speed in developing new products and services.

56.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. DIFFERETIATION

75.Portfolio management frameworks, such as the BCG matrix, share which of the following characteristics? A. Businesses are plotted on a 3-dimensional grid. B. Grid dimensions are based on external environments and internal capabilities/market positions. C. Position in the matrix suggests a need for sharing synergies. D. They are most helpful in helping businesses develop types of competitive advantage.

B. Grid dimensions are based on external environments and internal capabilities/market positions

75. Portfolio management frameworks, such as the BCG matrix, share which of the following characteristics A. Businesses are plotted on a 3-dimensional grid. B. Grid dimensions are based on external environments and internal capabilities/market positions. C. Position in the matrix suggests a need for sharing synergies. D. They are most helpful in helping businesses develop types of competitive advantage.

B. Grid dimensions are based on external environments and internal capabilities/market positions.

61.Which statement regarding competitive advantages is true? A. With an overall cost leadership strategy, firms need not be concerned with parity on differentiation. B. If several competitors pursue similar differentiation tactics, they may all be perceived as equals in the mind of the consumer. C. In the long run, a business with one or more competitive advantages is probably destined to earn normal profits. D. Attaining multiple types of competitive advantage is a recipe for failure.

B. If several competitors pursue similar differentiation tactics, they may all be perceived as equals in the mind of the consumer.

79. All of the following are limitations (or downsides) of the BCG (Boston Consulting Group) matrix EXCEPT: A. Every business cannot be accurately measured and compared on the two dimensions. B. It takes a dynamic view of competition which can lead to overly complex analyses. C. It views each business as a stand-alone entity and ignores the potential for synergies across businesses. D. While easy to comprehend, the BCG matrix can lead to some troublesome and overly simplistic prescriptions.

B. It takes a dynamic view of competition which can lead to overly complex analyses.

88. __________ entail the creation of a third-party legal entity, whereas __________ do not. A. Licensing agreements; joint ventures B. Joint ventures; strategic alliances C. Strategic alliances; joint ventures D. Franchising agreements; strategic alliances

B. Joint ventures; strategic alliances

PepsiCo leads Coca-Cola in the Indian market. Why? A. PepsiCo entered the market before Coca-Cola. B. PepsiCo formed a joint venture with two Indian companies to introduce its products under their label. C. Coca-Cola promoted too many products. D. Coca-Cola created too much direct employment in the beginning of its operation.

B. PepsiCo formed a joint venture with two Indian companies to introduce its products under their label.

59. If the U.S. dollar appreciates relative to foreign currency, what is likely to be the result for the U.S. company that has company branches abroad? A. Profits will increase, when measured in U.S. dollars. B. Profits will decrease, when measured in U.S. dollars. C. Foreign exports to the United States will decrease. D. Foreign demand for U.S. goods and services will decrease.

B. Profits will decrease, when measured in U.S. dollars.

62.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. broadly-defined target market is to a cost leadership strategy.

83. Which of the following describes the most typical order of entry into foreign markets? A. franchising, licensing, exporting, joint venture, and wholly owned subsidiary B. exporting, licensing, franchising, joint venture, and wholly owned subsidiary C. licensing, exporting, franchising, joint venture, and wholly owned subsidiary D. exporting, franchising, licensing, joint venture, and wholly owned subsidiary

B. exporting, licensing, franchising, joint venture, and wholly owned subsidiary

88. 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. global expansion

59.A differentiation strategy enables a business to address the five competitive forces by ______. A. having brand-loyal customers become more sensitive to prices. B. lessening competitive rivalry by distinguishing itself. C. increasing economies of scale D. serving a broader market segment

B. lessening competitive rivalry by distinguishing itself.

71. Dell Computer has an online ordering system that allows consumers to configure their own computers before Dell builds them. This capability is an example of _____________. A. electronic data interchange B. mass customization C. knowledge management D. collaborative design

B. mass customization

80. The primary means by which a firm can diversify are __________, _________, and ________. A. mergers and acquisitions; differentiation; overall cost leadership B. mergers and acquisitions; joint ventures and strategic alliances; internal development C. joint ventures and strategic alliances; integration of value chain activities; acquiring human capital D. mergers and acquisitions; internal development; differentiation

B. mergers and acquisitions; joint ventures and strategic alliances; internal development

66. High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy? A. global strategy B. multidomestic strategy C. transnational strategy D. overall cost leadership strategy

B. multidomestic strategy

51.With experience, unit costs of production decline as _________ increases in most industries. A. costs. B. output C. price D. volume

B. output

69. Creating value within business units can happen when the corporate office helps subsidiaries make wise choices in their own acquisitions, divestures, and new ventures. This is known as ________. A. restructuring B. parenting C. leveraging core competencies D. increasing market power

B. parenting

91. The term golden parachute refers to _________. A. a clause requiring that huge dividend payments be made upon takeover B. pay given to executives fired because of a takeover C. financial inducements offered by a threatened firm to stop a hostile suitor from acquiring it D. managers of a firm in a hostile takeover approaching a third party about making the acquisition

B. pay given to executives fired because of a takeover

66.A __________ can be defined as the 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. profit pool

52. The Cisco acquisition of Pure Digital Technologies, the parent of the Flip video camera, failed because __________________. A. Cisco had valuable competencies B. the Flip division of Cisco was slow and less responsive to market pressures C. consumers continued to purchase the camera D. Cisco had good vision of the market

B. the Flip division of Cisco was slow and less responsive to market pressures

74. Which one of the following is not a limitation of a global strategy? A. limited ability to adapt to local markets B. the ability to locate activities in optimal locations C. the concentration of activities may increase dependence on a single facility D. single locations may lead to higher tariffs and transportation costs

B. the ability to locate activities in optimal locations

72. As in the case of Siebel Systems (now part of Oracle), elements of a global strategy may facilitate the competitive advantage of differentiation by _______. A. increased freedom of individual business units to adapt to local tastes B. the creation of a worldwide network to achieve consistent service regardless of location C. flexibility in applying Research and Development to meet country-specific needs D. tailoring products to meet country-specific needs

B. the creation of a worldwide network to achieve consistent service regardless of location

68. Vertical integration is attractive when ____________. A. internal administrative costs are higher than transaction costs B. transaction costs are higher than internal administrative costs C. transaction costs and internal administrative costs are equal D. search costs are higher than monitoring costs

B. transaction costs are higher than internal administrative costs

78. Units coordinate their activities with headquarters and with one another. Units adapt to special circumstances only they face. The entire organization draws upon relevant corporate resources. These are all attributes of which type of strategy? A. global strategy B. transnational strategy C. international strategy D. multidomestic strategy

B. transnational strategy

68. Industries in which proportionally more value is added in __________ activities are more likely to benefit from a global strategy. A. downstream B. upstream C. marketing D. sales

B. upstream

64.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. All rivals share a common input or raw material. buyer needs.

67.Which of the following is not a potential pitfall of an integrated overall low cost and differentiation strategy? A. Firms that fail to attain both strategies may end up with neither and become stuck-in-the-middle B. Firms that underestimate the challenges and expenses associated with coordinating value-creating activities in the extended value chain. C. Firms that target too large a market that causes unit costs to increase. D. Firms that miscalculate sources of revenue and profit pools in the company industry.

C. Firms that target too large a market that causes unit costs to increase.

62. Which one of the following is one of the Theodore Levitt assumptions supporting a pure global strategy? A. Consumers are willing to pay more for specific product features. B. Customer needs and interests are becoming more dissimilar. C. MNCs can successfully compete globally by aggressively pricing products at the sacrifice of product features. D. If the world markets are treated as heterogeneous, substantial economies of scale are easily achieved.

C. MNCs can successfully compete globally by aggressively pricing products at the sacrifice of product features.

76.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.

C. Market share gains by pioneers are usually easily sustained for many years

60. __________ occurs when a firm decides to utilize other firms to perform value-creating activities that were previously performed in-house. A. Offshoring B. A global strategy C. Outsourcing D. A transnational strategy

C. Outsourcing

74. In the BCG Matrix, a business that has a low market share in an industry characterized by high market growth is termed a ____________. A. Star B. Cash Cow C. Question Mark D. Dog

C. Question Mark

73. When using a BCG matrix, a business that currently holds a large market share in a rapidly growing market and has minimal or negative cash flow would be known as a __________. A. Cash Cow B. Dog C. Star D. Question Mark

C. Star

58.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. Supplier power is increased, because suppliers will be able to charge higher prices for their inputs.

53. Which of the following is not a reason for merger and acquisition failures? A.The acquiring company pays too high a premium for the common stock of the target company. B. Top executives act in their best interests rather than those of the shareholders. C. The acquired company assets are poorly integrated into the acquiring company business lines. D.The acquisition leads to value creation.

C. The acquisition leads to value creation.

52. In the Porter Diamond of National Advantage framework which of the following factors does not affect nation competitiveness? A. The position of the nation in factors of production necessary to compete in a given industry. B. The presence or absence in the nation of supplier industries that are internationally competitive. C. The conditions in the nation governing the nature of foreign rivalry. D. The nature of home-market demand of the products or services of the industry.

C. The conditions in the nation governing the nature of foreign rivalry.

63.A firm following a focus strategy must focus on _____________. A. governmental regulations. B. the rising cost of inputs C. a market segment or group of segments D. avoiding entering international markets.

C. a market segment or group of segments

An antitakeover tactic in which existing shareholders have the option to buy additional shares of stock at a discount to the current market price is called ______. A. greenmail B. a golden parachute C. a poison pill D. scorched earth

C. a poison pill

73.Due to the Internet, firms that use a focus strategy have new opportunities to _________. A. respond quickly to customer requests B. provide more services and features C. access niche markets in a highly specialized fashion D. access markets less expensively

C. access niche markets in a highly specialized fashion

67. Transaction costs include all of the following costs EXCEPT A. search costs B. negotiating costs C. agency costs D. monitoring costs

C. agency costs

85.In the __________ stage of the industry life cycle, there are few segments, the emphasis on process design is low, and the major functional areas of concern are general management and finance. A. introduction b. growth c.decline d. maturity

C. decline

86.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. decline in the market life cycle

57. High product differentiation is generally accompanied by __________. A. higher market share. B. higher profit margins and lower costs C. decreased emphasis on competition based on price. D. significant economies of scale

C. decreased emphasis on competition based on price.

75. Elements of a multidomestic strategy may facilitate the competitive advantage of cost leadership by __________. A. flexibility in adjusting to local laws and customs B. decreased duplication of inventories which are often involved in having multiple plants producing similar products C. decreased shipping and transportation costs inherent in local production D. economies of scale gained through centralized production of standardized products

C. decreased shipping and transportation costs inherent in local production

65.The text discusses three approaches to combining overall cost leadership and differentiation competitive advantages. Which of the following is not one of these three approaches? A. automated and flexible manufacturing systems B. exploiting the profit pool concept for competitive advantage C. deriving benefits from highly focused and high technology markets D. coordinating the extended value chain by way of information technology

C. deriving benefits from highly focused and high technology markets .

53.Convincing rivals not to enter a price war, protection from customer pressure to lower prices, and the ability to better withstand cost increases from suppliers characterize which type of competitive strategy? A. differentiation. B. overall cost leadership. C. differentiation focus. D. cost leadership focus

C. differentiation focus.

82. Divesting of businesses can accomplish many different objectives, except _______. A. enabling managers to focus their efforts more directly on the core businesses of the firm B. providing the firm with more resources to spend on more attractive alternatives C. dispersing manager focus D. raising cash to help fund existing businesses

C. dispersing manager focus

58. The sale of Boeing commercial aircraft and Microsoft operating systems in many countries enables these companies to benefit from ____________. A. higher prices in their domestic markets B. reducing their exposure to currency risks C. economies of scale D. optimizing the location for many activities in their value chain

C. economies of scale

70.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. evaluating employee performance

89.Piecemeal productivity improvements during a turnaround typically do NOT involve _______. A. business process reengineering B. increased capacity utilization C. expansion of company product market scope D. benchmarking

C. expansion of company product market scope

89. The antitakeover tactic, _______, is when a firm offers to buy shares of their stock from a company (or individual) planning to acquire their firm at a higher price than the unfriendly company paid for it. A. golden parachute B. poison pill C. greenmail D. scorched earth

C. greenmail

52.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 advantage D. lower than firms that achieve differentiation advantages but higher than firms that achieve cost advantages

C. higher than firms that achieve either a cost or a differentiation advantage

77.In the __________ stage of the industry life cycle, the emphasis on product design is very high, the intensity of competition is low, and the market growth rate is low. A. growth B. maturity C. introduction D. decline

C. introduction

64.The risks of vertical integration include all of the following EXCEPT: A. costs and expenses associated with increased overhead and capital expenditures.' B. problems associated with unbalanced capacities along the value chain. C. lack of control over valuable assets D. additional administrative costs associated with managing a more complex set of activities.

C. lack of control over valuable assets

84. A domestic corporation considering international expansion for the first time typically will follow which of these paths? A. franchising, licensing, exporting, joint venture, and wholly owned subsidiary B. exporting, licensing, franchising, joint venture, and wholly owned subsidiary C. licensing, exporting, franchising, joint venture, and wholly owned subsidiary D. exporting, franchising, licensing, joint venture, and wholly owned subsidiary

C. licensing, exporting, franchising, joint venture, and wholly owned subsidiary

78. In the BCG Growth Share Matrix, the suggested strategy for Stars is to ________. A. milk them to finance other businesses B. invest large sums to gain a good market share C. maintain position and after the market growth slows use the business to provide cash flow D. not invest in them and to shift cash flow to other businesses

C. maintain position and after the market growth slows use the business to provide cash flow

72.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. mass customization

79.In the __________ stage of the industry life cycle, there are many segments, competition is very intense, and the emphasis on process design is high. A. introduction B. growth C. maturity D. decline

C. maturity

80.In a given market, key technology no longer has patent protection, experience is not an advantage, and there is a growing need to compete on price. What stage of its life cycle is the market in? A. introduction B. growth C. maturity D. decline

C. maturity

81.A market that mainly competes on the basis of price and has stagnant growth is characteristic of what life cycle stage? A. introduction B. growth C. maturity D. decline

C. maturity

83.The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle? A. introduction B. growth C. maturity D. decline

C. maturity

88. According to Michael Porter, there is a tremendous allure to _________. It is the big play, the dramatic gesture. With one stroke of the pen you can add billions to size, get a front-page story, and create excitement in markets. A. strategic alliances and joint ventures B. internal development C. mergers and acquisitions D. differentiation strategies

C. mergers and acquisitions

87. Internal development may be time consuming and, therefore, firms may forfeit the benefits of speed that growth through __________ and __________ can provide. A. strategic alliances; joint ventures B. strategic alliances; mergers C. mergers; acquisitions D. mergers; strategic alliances

C. mergers; acquisitions

48.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. overall cost leadership.

80. In order to realize the strongest competitive advantage, firms engaged in worldwide competition must ___________. A. require that all of their various business units follow the same strategy regardless of location B. ensure that all business units follow a strategy strictly tailored to their respective locations C. pursue a strategy that combines the uniformity of a global strategy and the specificity of a multidomestic strategy in order to achieve optimal results D. attempt to use the strategy that was most successful in their home country

C. pursue a strategy that combines the uniformity of a global strategy and the specificity of a multidomestic strategy in order to achieve optimal results

49.A manufacturing business pursuing cost leadership is likely to _______. A. focus on a narrow market segment. B. use advertising to build brand image. C. rely on experience effects to raise efficiency. D. put heavy emphasis on product engineering

C. rely on experience effects to raise efficiency.

85. Which of the following is not part of a good guideline list for managing strategic alliances? A. establishing a clear understanding between partners B. not shortchanging your partner C. relying primarily on a contract to make the joint venture work D. working hard to ensure a collaborative relationship between partners

C. relying primarily on a contract to make the joint venture work

70. Creating value within business units can happen when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant, positive change. This is action is known as ______. A. parenting B. leveraging core competencies C. restructuring D. sharing activities

C. restructuring

86. Fees that a multinational receives from a foreign licensee in return for its use of intellectual property (trademark, patent, trade secret, technology) are usually called _____________. A. transfer prices B. dividends C. royalties D. intra-corporate inflows

C. royalties

When management uses common production facilities or purchasing procedures to distribute different but related products, they are ________________. A. building on core competencies B. achieving process gains C. sharing activities D. using portfolio analysis

C. sharing activities

76. Which of the following is not a limitation of a multidomestic strategy? A. less ability to realize cost savings through scale economies B. greater difficulty in transferring knowledge across countries C. single locations may lead to higher tariffs and transportation costs D. may lead to overadaptation as conditions change

C. single locations may lead to higher tariffs and transportation

83. Verizon Wireless and ILS Technology have a _________ whereby Verizon integrates technology developed by ILS to improve its machine-to machine (M2M) data transmission systems. M2M systems allow firms to securely transmit data to and from various devices. A. joint diversification B. divestment C. strategic alliance D. global integration

C. strategic alliance

55. Which of the factors below has not made the software services industry in India extremely competitive on a global scale? A. large pool of skilled workers B. large network of public and private educational institutions C. tax and antitrust legislation that protects the dominant players in the industry D. large, growing market and sophisticated customers

C. tax and antitrust legislation that protects the dominant players in the industry

82.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. there is increasing emphasis on efficiency

77. High pressure for local adaptation combined with high pressure for lower costs would suggest what type of international strategy? A. global strategy B. multidomestic strategy C. transnational strategy D. differentiation strategy

C. transnational strategy

79.Which of the following is a disadvantage of a transnational strategy? A. less ability to realize cost savings through scale economies B. limited ability to adapt to local markets C. unique managerial challenges in fostering knowledge transfer D. single locations may lead to higher tariffs and transportation costs

C. unique managerial challenges in fostering knowledge transfer

57.Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________. A.using related diversification to achieve value by pooling negotiating power to achieve market power B.using related diversification to achieve value by leveraging core competencies to achieve economies of C. using related diversification to achieve value by integrating vertically in order to acquire market power D. using related diversification to achieve value by integrating vertically in order to attain economies of scope

C. using related diversification to achieve value by integrating vertically in order to acquire market power

89. A __________ is a business in which a multinational company owns 100 percent of the stock. A. joint venture B. strategic alliance C. wholly owned subsidiary D. franchising operation

C. wholly owned subsidiary

87.During the decline stage of the industry life cycle, __________ refers to obtaining as much profit as possible and requires that costs be decreased quickly A. maintaining B. exiting C.harvesting D. consolidating

C.harvesting

82. Which one of the following explains why so few firms are global? A. Culture, language, and religion are similar between countries. B. Legal and political systems are similar between countries. C. Governments are increasing trade restrictions in general. D. Geographic distance is multiplied by distance in culture, language, religion, and legal and political systems.

D. Geographic distance is multiplied by distance in culture, language, religion, and legal and political systems.

75.Which of these statements regarding the industry life cycle is correct? A. Part of the power of the market life cycle is its ability to serve as a short-run forecasting device. B. Trends suggested by the market life cycle model are generally not reversible or repeatable. C. It points out the need to maintain a differentiation advantage and a low cost advantage simultaneously. D. It has important implications for company generic strategies, functional areas, value-creating activities, and overall objectives.

D. It has important implications for company generic strategies, functional areas, value-creating activities, and overall objectives

81. The downsides or limitations of mergers and acquisitions include all of the following EXCEPT: A. Premiums that are frequently paid to acquire a business are expensive. B. Difficulties exist in integrating the activities and resources of the acquired firm into on-going operations. C. There can be many cultural issues that can doom an otherwise promising acquisition. D. It is a slow means to enter new markets and acquire skills and competences.

D. It is a slow means to enter new markets and acquire skills and competences.

57. If a company is considering optimizing the physical location for every activity in the value chain, which of the following is not a possible strategic advantage for that decision? A. Performance enhancement B. Cost reduction C. Political risk reduction D. Life-cycle enhancement

D. Life-cycle enhancement

50. Which of the following is not a risk normally associated with Bottom of the Pyramid strategies? A. A low-end version of a brand may detract from the overall brand attractiveness. B. The new low-cost products they develop may cannibalize the sales of their core products C. Entrenched competitors can impact the ability of the new firm to enter the market successfully D. New products may be perceived as exploiting the privileged customer with substandard products.

D. New products may be perceived as exploiting the privileged customer with substandard products.

77. In managing the corporate portfolio, the BCG matrix would suggest that __________. A. Dogs should be invested in to increase market share and become Cash Cows B. Stars are in low growth markets and can provide excess cash to fund other opportunities C. Cash Cows require substantial cash outlays to maintain market share D. Question Marks can represent future Stars if their market share is increased

D. Question Marks can represent future Stars if their market share is increased

For a core competence to be a viable basis for the corporation strengthening a new business unit, there are three requirements. Which one of the following is not one of these requirements? A. The competence must help the business gain strength relative to its competition B. The new business must be similar to existing businesses to benefit from a core competence. C. The collection of competencies should be unique, so that they cannot be easily imitated. D. The new business must have an established large market share.

D. The new business must have an established large market share.

73. Which of the following is not a risk associated with a global strategy? A. A firm with only one manufacturing location must export its product, sometimes at great distance from the operation. B. The geographic concentration of any activity may also tend to isolate that activity from the targeted markets. C. Concentrating an activity in a single location makes the rest of the firm dependent on that location. D. The pressures for local adaptation may elevate the cost structure of the firm.

D. The pressures for local adaptation may elevate the cost structure of the firm.

69.Atlas Door created competitive advantage by reducing the time to receive and process and order and through installing a just in time logistics operation. Which of the following is not a reason for their favorable position relative to the five forces of industry competition? A. It exerted power over its customers. B. It created high entry barriers for new entrants. C. The integration of many value-chain activities in the firm provided causal ambiguity and path dependency. D. The product was easily imitable.

D. The product was easily imitable

61. In considering the decision to offshore, which of the following generally is not one of the hidden costs? A. Total wage costs and indirect costs B. Increased inventory and coordination costs C. Reduced market responsiveness and intellectual property rights D. Wage deflation

D. Wage deflation

90. __________ are most appropriate when a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations in many countries. A. Joint ventures B. Strategic alliances C. Licensing agreements D. Wholly owned subsidiaries

D. Wholly owned subsidiaries

The primary aim of strategic management at the business level is __________________. A. maximizing risk-return tradeoffs through diversification. B. achieving a low cost position. C. maximizing differentiation of products and/or services. D. achieving competitive advantage

D. achieving competitive advantage

71. According to the text, corporate restructuring includes A. capital restructuring, asset restructuring, and technology restructuring B. global diversification, capital restructuring, and asset restructuring C. management restructuring, financial restructuring, and procurement restructuring D. capital restructuring, asset restructuring, and management restructuring

D. capital restructuring, asset restructuring, and management restructuring

68.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. company commitment to innovation

72. Portfolio management matrices are applied to what level of strategy? A. departmental level B. business level C. international level D. corporate level

D. corporate level

85. The form of entry strategy into international operations that offers the lowest level of control for the domestic corporation would be _________. A. franchising B. licensing C. joint venture D. exporting

D. exporting

69. Which of the following types of international firms are most likely to benefit from a global strategy as opposed to a multidomestic strategy? A. firms that compete in industries in which consumer preferences vary substantially in each country B. firms in industries that are expanding very rapidly C. firms in industries that have value added by sales and marketing departments D. firms in industries that have much value added in research and design or manufacturing

D. firms in industries that have much value added in research and design or manufacturing

92. Antitakeover tactics include all of the following EXCEPT _________. A. greenmail B. poison pills C. golden parachutes D. golden handcuffs

D. golden handcuffs

90.Which of the following is not a reason for 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. increasing its manpower across the company

84. Cooperative relationships such as __________ have potential advantages such as entering new markets, reducing manufacturing (or other) costs in the value chain, and developing and diffusing new technologies. A. joint ventures B. mergers C. acquisitions D. joint ventures and strategic alliances

D. joint ventures and strategic alliances

Which of the following is not a motivation for a company to pursue international expansion? A. large pool of skilled workers B. large network of public and private educational institutions C. tax and antitrust legislation that protects the dominant players in the industry D. large, growing market and sophisticated customers

D. large, growing market and sophisticated customers

76. A Cash Cow, in the BCG framework, refers to a business that has _______________. A. high market growth and relatively high market share B. relatively low market share and low market growth C. relatively low market share and high market growth D. low market growth and relatively high market share

D. low market growth and relatively high market share

54. According to Michael Porter, firms that have experienced intense domestic competition are _________________________________. A. unlikely to have the time or resources to compete abroad B. more likely to demand protection from their governments C. most likely to design strategies aimed primarily at the domestic market D. more likely to design strategies and structures that allow them to successfully compete abroad

D. more likely to design strategies and structures that allow them to successfully compete abroad

55.A firm can achieve differentiation through all of the following means EXCEPT ________. A. improving brand image B. better customer service C. adding additional product feature D. offering lower prices to frequent customers

D. offering lower prices to frequent customers

55. Diversification initiatives include all of the following except ___________________. A.mergers and acquisitions B.strategic alliances C. joint ventures D. shareholder development

D. shareholder development

71. Firms following a global strategy strive to offer __________ products and services as well as locate manufacturing, Research and Development, and marketing activities in a limited number of locations. A. widely differentiated B. more expensive local C. internationally differentiated D. standardized

D. standardized

53. Rivalry is intense in nations with conditions of __________ consumer demand, __________ supplier bases, and __________ new entrant potential from related industries. A. weak; weak; high B. strong; strong; low C. weak; weak; low D. strong; strong; high

D. strong; strong; high

66. A firm should consider vertical integration when ___________. A. the competitive situation is highly volatile B. customer needs are evolving C. the suppliers of the firm willingly cooperate with the D. the suppliers of raw materials to the firm are often unable to maintain quality standards

D. the suppliers of raw materials to the firm are often unable to maintain quality standards

64.When firms expand into global markets, they are faced with the choice of reducing costs and/or adapting to the local market. When high pressures exist to adapt locally, companies should choose a __________ or __________ in order to compete in the global marketplace. A. global strategy; transnational strategy B. global strategy: multidomestic strategy C. international strategy; global strategy D. transnational strategy; multidomestic strategy

D. transnational strategy; multidomestic strategy

58.At Cooper Industries, there are few similarities in the products it makes or the industries in which it completes. The corporate office adds value through such activities as superb human resource practices and budgeting systems. This is an example of __________________. A. using related diversification to achieve value by leveraging core competencies to attain economies of scope B. using related diversification to achieve value by leveraging core competencies to acquire market power C. using unrelated diversification to achieve value through portfolio management in order to acquire financial synergies D. using unrelated diversification to achieve value through restructuring and parenting

D. using unrelated diversification to achieve value through restructuring and parenting

63. Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input into its manufacturing process. This is an example of ______________. A. leveraging core competencies B. sharing activities C. pooled negotiating power D. vertical integration

D. vertical integration

65. Unbalanced capacities that limit cost savings, difficulties in combining specializations, and reduced flexibility are disadvantages associated with ___________. A. strategic alliances B. divestment C. horizontal integration D. vertical integration

D. vertical integration .

74.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

answer B Many experts agree that the net effect of the digital economy is fewer rather than more opportunities for sustainable advantages. This means strategic thinking becomes more important. More specifically, the Internet has provided all companies with greater tools for managing costs.