GEB 4891 Final

Path dependence rests on the notion that 1) time cannot be compressed at will. 2) strategic decisions are easily reversible. 3) rare resources can be built in a short period of time. 4) competitive advantage can be sustained indefinitely.

1) time cannot be compressed at will.

Which of the following management tools will help determine the external opportunities and threats that affect a firm? 1) Porter's five forces analysis 2) PESTEL analysis 3) VRIO framework 4) Ansoff's matrix

2) PESTEL analysis

Which of the following best expresses fixed asset turnover? 1) Current assets/Fixed assets 2) Revenue/Fixed assets 3) Fixed assets/Total return to shareholders 4) Fixed assets/Current liabilities

2) Revenue/Fixed assets

Which of following practices of a firm satisfies its ethical responsibilities? 1) using plastic as the packaging material though it is harmful to the environment, yet legal 2) outsourcing production to a less developed country and paying wages that are below its own country's accepted minimum wages 3) using advertising and other forms of promotion to endorse luxurious lifestyles 4) selling vaccines at a subsidized price in a less developed country even though this results in reduced shareholder returns

4) selling vaccines at a subsidized price in a less developed country even though this results in reduced shareholder returns

Why do companies use strategic group models? 1) to reveal product differences between firms in the same industry 2) to reveal potential areas of industry convergence between firms in different industries 3) to reveal common threads between firms in different industries 4) to reveal performance differences between clusters of firms in the same industry

4) to reveal performance differences between clusters of firms in the same industry

The cost of capital to create a product is a fixed cost because it is 1) directly proportional to the output level. 2) uniform throughout all firms and industries. 3) not a part of the profit calculations. 4) unaffected by consumer demand.

4) unaffected by consumer demand.

Which of the following best explains why IBM has been able to maintain its competitive advantage? 1) IBM successfully transformed itself multiple times in the data information industry over a period of more than 100 years. 2) IBM hired a new CEO to refocus the company on satisfying market needs, which demanded IT services. 3) IBM focused on producing mainframe and mini-computers that would be produced by fully integrated companies. 4) IBM helped kick-start the PC revolution in 1981 by setting an open standard in the computer industry with the introduction of the IBM PC.

1) IBM successfully transformed itself multiple times in the data information industry over a period of more than 100 years.

Which of the following is an advantage of using a functional structure when pursuing a cost-leadership strategy? 1) It allows a cost-leader to upgrade core competencies in manufacturing and logistics. 2) It enables a cost-leader to build products that are different from its competitors' offerings. 3) It enables a cost-leader to increase costs above that of its competitors. 4) It allows a cost-leader to operate in a decentralized organizational structure.

1) It allows a cost-leader to upgrade core competencies in manufacturing and logistics.

Allure is a cosmetic brand that pursues a cost-leader strategy. Which of the following statements is true of the cosmetic brand? 1) It appeals to the price-conscious buyers. 2) Its primary value driver is product uniqueness. 3) It charges a premium price for its products. 4) It directly competes against luxury cosmetic brands that charge premium prices.

1) It appeals to the price-conscious buyers.

Which of the following is one of the features of an international strategy? 1) It is characterized by limited local responsiveness. 2) It is one of the newest types of global strategies. 3) It is characterized by cost-leadership as a preferred business strategy. 4) It is often used successfully by firms with relatively small domestic markets.

1) It is characterized by limited local responsiveness.

Which of the following is an assumption that top-down strategic planning rests on? 1) We can predict the future from the past. 2) Time cannot be compressed at will. 3) Decisions made in the past do not affect our future. 4) Change is constant.

1) We can predict the future from the past.

Which of the following is an assumption that top-down strategic planning rests on? 1) We can predict the future from the past. 2) Time cannot be compressed at will. 3)Decisions made in the past do not affect our future. 4) Change is constant.

1) We can predict the future from the past.

How can a firm pursuing a diversification strategy enhance its overall corporate performance by leveraging financial economies? 1) by using internal capital markets as a source of value creation 2) by adding more unrelated businesses into its corporate portfolio 3) by increasing its coordination and influence costs 4) by investing in businesses under the question mark quadrant of the BCG matrix

1) by using internal capital markets as a source of value creation

Tangles Costume Jewelry offers slightly lower quality merchandise than competitors at a much lower price. What strategy is Tangles using? 1) cost-leadership 2) differentiation 3) niche marketing 4) product diversification

1) cost-leadership

Hitoro Inc. developed a superior touch screen technology for tablet computers that enabled multiple users to operate the screen at the same time. The technology was leased to Revox Inc., a consumer electronics company, for five years. Which of the following alternatives to integration does this best illustrate? 1) licensing 2) franchising 3) crowdsourcing 4) bootlegging

1) licensing

From an investors' or shareholders' perspective, the measure of competitive advantage that matters most is the 1) return on risk capital. 2) economic value created. 3) consumer surplus. 4) inventory turnover.

1) return on risk capital.

The process of alliance management begins with 1) selecting the best possible partner. 2) choosing an appropriate governance mechanism. 3) designing the alliance. 4) creating resource combinations that obey the VRIO criteria.

1) selecting the best possible partner.

A company wants to determine how industry effects have affected its profitability. Which of the following elements should the company focus on? 1) the barriers to entry and exit within the industry 2) the pricing method opted by the managers to face competition within the industry 3) the brand strategy the managers adopt to establish the firm in the industry 4) the strategic position the firm pursues within the industry

1) the barriers to entry and exit within the industry

Fierce domestic competition in Lobekistan makes a tough environment for any motorcycle company. Success requires top-notch engineering of chassis and engines, as well as keeping costs and fuel consumption in check. As a result, Lobekistan's motorcycles have a competitive advantage in the global market. According to Porter's diamond framework, this scenario shows the influence of competitive intensity in 1) a peripheral industry. 2) a focal industry. 3) supportive complementors. 4) related complementors.

2) a focal industry.

Which of the following would be the result of product innovation? 1) a new system for shipping large packages 2) an inexpensive, high-quality refrigerator 3) an inexpensive method of producing bicycle wheels 4) a new technology for Internet servers

2) an inexpensive, high-quality refrigerator

In a firm's external environment, _____ primarily capture population characteristics related to age, gender, family size, ethnicity, sexual orientation, religion, and socioeconomic class. 1) political trends 2) demographic trends 3) ecological trends 4) economic trends

2) demographic trends

SyncTouch Inc. is a manufacturer of cell phones. It has released an improvised version of its smartphone in markets in which the company already operates. Which of the following types of innovations does this scenario best illustrate? 1) radical innovation 2) incremental innovation 3) architectural innovation 4) disruptive innovation

2) incremental innovation

If a resource is common 1) competitive advantage will persist with one firm for a long period of time. 2) it will result in perfect competition. 3) it will result in greater resource immobility. 4) competitive parity will cease to exist.

2) it will result in perfect competition.

Strong organizational cultures that are strategically relevant align employees' behaviors more fully with the organization's 1) hierarchical rigidity. 2) strategic goals. 3) hierarchical structure. 4) strategic flexibility.

2) strategic goals.

Cynthia works as a front-line employee for a nationwide retail store. She reports to a floor manager, who reports to a departmental manager, who reports to a regional supervisor, who reports to a vice president, who reports to the CEO. Which of the following best describes this retail store? 1) flat structure 2) tall structure 3) centralized structure 4) decentralize structure

2) tall structure

The downside of equity alliances is 1) the weaker ties and reduced trust between partners. 2) the amount of investment that can be involved. 3) that the alliances cannot be abandoned if not promising. 4) that they are not useful stepping-stones toward full integration of the partner firms.

2) the amount of investment that can be involved.

Which of the following is a feature of the shakeout phase of the industry life cycle? 1) There is rapid industry growth during this stage. 2) Market demand in this stage primarily consists of first-time adopters. 3) Competitive intensity within the industry increases. 4) The mode of competition shifts from price to non-price in this stage.

3) Competitive intensity within the industry increases.

_____ are the board members who are part of a company's senior management team appointed by shareholders to provide the board with necessary information pertaining to the company's internal workings and performance. 1) Investors 2) Outside directors 3) Inside directors 4) Auditors

3) Inside directors

Which of the following statements is true of internal transaction costs? 1) Internal transaction costs arise when companies transact in the open market. 2) When the internal costs involved in pursuing an activity in-house are more than the costs of transacting, then the concerned firm should vertically integrate. 3) Internal transaction costs tend to increase with organizational size and complexity. 4) It is beneficial to "buy" goods or services rather than "make" when internal transaction costs are low.

3) Internal transaction costs tend to increase with organizational size and complexity.

Which of the following is an advantage offered by a functional structure? 1) It allows for an efficient top-down communication chain and thus relies on a relatively tall structure. 2) It facilitates a lower division of labor, which is linked to higher productivity. 3) It allows for a higher degree of specialization and deeper domain expertise. 4) It facilitates a lower level of specialization.

3) It allows for a higher degree of specialization and deeper domain expertise.

Why does a functional structure rely on a flat organizational structure? 1) The work in the organization is centrally coordinated by the CEO. 2) It allows for a higher degree of specialization and domain expertise. 3) It allows for efficient bottom-up and top-down communication. 4) It allows for the implementation of a differentiation strategy.

3) It allows for efficient bottom-up and top-down communication.

Which of the following describes an airline that is most likely stuck in the middle? 1) Red Carpet Airline that offers complimentary drinks and meals, coast-to-coast coverage via connecting hubs, plush airport lounges, and high prices. 2) Plush Airline that offers international routes and global coverage, high customer service, high reliability, and high prices. 3) Just Right Airline offers high-quality beverages and meals, plush airport lounges, only a few connections via hubs domestically, poor customer service, and low prices. 4) Bottom Line Airline that offers no assigned seating, no in-flight amenities, no drinks or meals, no airport lounges, and low prices.

3) Just Right Airline offers high-quality beverages and meals, plush airport lounges, only a few connections via hubs domestically, poor customer service, and low prices.

Which of the following statements should ideally reflect a firm's strategy for competitive advantage? 1) Our strategy is to win at any cost. 2) We will be number one in the industry. 3) Our aim is to create superior customer value while controlling costs. 4) We want to be the market leader by replicating our competitor's strategy.

3) Our aim is to create superior customer value while controlling costs.

Which of the following statements is true about strategic groups? 1) It is not possible to have two different strategic groups within the same industry. 2) Rivalry within the same strategic group tends to be lower than rivalry between different strategic groups. 3) Profitability varies between different strategic groups. 4) Companies within the same strategic group are complementors to each other.

3) Profitability varies between different strategic groups.

_____ are best described as unique assets with high opportunity costs that have significantly more value in their intended use than in their next-best use. 1) Cost drivers 2) Value drivers 3) Specialized assets 4) Liquid assets

3) Specialized assets

Handy Helper, Inc. produces decent-quality woodworking tools at a mid-range price. Master Tools, Inc. produces high-quality tools also at a mid-range price. Master Tools gained a competitive advantage because it has ______ than Handy Helper. 1) higher economies of scope 2) lower economies of scope 3) a higher value gap 4) a lower value gap

3) a higher value gap

Customer-oriented visions do not 1) leave open the means to of how to meet a need. 2) define a business according to solutions. 3) define how a customer need will be met. 4) provide companies with a competitive advantage.

3) define how a customer need will be met.

Green Rabbit Products Inc. (GRP) is a large conglomerate. The human resources department of its telecom division has decided to reduce its employee turnover by encouraging internal promotions. Which of the following strategies does this scenario best illustrate? 1) corporate strategy 2) business strategy 3) functional strategy 4) grand strategy

3) functional strategy

A company scientist at a biotechnology company decides to work on his own research project, hoping to eventually start his own firm, rather than on the project he was assigned. However, the company's stockholders are unaware of this situation. This is an example of a(n) _____ in the context of a principle-agent problem. 1) adverse selection 2) stakeholder strategy 3) moral hazard 4) shared value creation

3) moral hazard

Which of the following is a top-down approach to the development of strategy that involves asking "what if" questions to anticipate plausible futures? 1) top-down strategic planning 2) bottom-up strategic thinking 3) scenario planning 4) reverse mentoring

3) scenario planning

Which of the following characteristics of a public stock company deals with principals and agents? 1) limited liability of investors 2) transferability of investor ownership 3) separation of legal ownership and management control 4) legal personality

3) separation of legal ownership and management control

In 1984, GM and Toyota formed a joint venture called New United Motor Manufacturing Inc. Each partner was motivated to learn new capabilities. This joint venture is an example of 1) creating a real-options perspective. 2) accessing complimentary assets. 3) using co-opetition. 4) forming a conglomerate.

3) using co-opetition.

Which of the following is an example of competitive parity? 1) A firm manufactures higher-quality wall clocks than its competitors 2) A firm provides wall clocks that its consumers value more than other wall clocks 3) A firm sells wall clocks at a lower price than its competitors 4) A firm produces wall clocks at the same rate as its competitors

4) A firm produces wall clocks at the same rate as its competitors

Which of the following describes a firm in the Globalization 1.0 stage? 1) Robinson Inc. has a large office in New York, which is one cog in a global network. 2) Robinson Inc. has a large office in New York, which functions with other large offices in Europe and Asia. 3) Robinson Inc. has a base office in New York and a replica office in Amsterdam. 4) Robinson Inc. has a base office in New York and distributes some of its products overseas.

4) Robinson Inc. has a base office in New York and distributes some of its products overseas.

_____ is a business model in which the manufacturer sets a fixed price on a product, but the retailer is to free set its own price. 1) Agency 2) Freemium 3) Bundling 4) Wholesale

4) Wholesale

Digital photography replacing film photography would be an example of a(n) 1) regressive innovation. 2) radical innovation. 3) architectural innovation. 4) disruptive innovation.

4) disruptive innovation.

Which of the following is a feature of an oligopolistic industry structure? 1) many small sellers 2) standardized or undifferentiated products 3) limited pricing power 4) high entry barriers

4) high entry barriers

Jane is the CEO of a clothing brand, Diva Rule Inc., which has retail stores and production units in five different countries. The firm's shareholders ensure the proper management of Diva Rule Inc. through their appointed board of directors. In this scenario, Diva Rule Inc. is most likely a 1) nonprofit organization. 2) nationalized firm. 3) sole proprietorship. 4) multinational enterprise.

4) multinational enterprise.

When should mergers and acquisitions (M&A) be considered the "buy" option for a strategist trying to determine which corporate strategy to implement? 1) when the resource in question is highly tradable 2) before the strategist has considered borrowing the necessary resources through integrated strategic alliances 3) after it has been established that the firm's internal resources are sufficient to build 4) when extreme closeness to the resource partner is necessary to understand and obtain its underlying knowledge

4) when extreme closeness to the resource partner is necessary to understand and obtain its underlying knowledg