MGMT 4000 Exam 1- quizzes

Which of the following statements is true of an oligopoly?

It is often analyzed using game theory.

Which of the following is a disadvantage of the balanced scorecard approach to measure firm performance?

It provides only limited guidance about which performance metrics to choose.

In the financial year 2016, for every $100 in revenues, Microsoft earned $21.5 in profit, while Apple earned $20.6 in profit. This demonstrates that

Microsoft's return on revenue was higher than that of Apple.

When asked to explore the strengths and weaknesses of a firm, which of the following would be the best framework to employ? Value Chain analysis PESTEL analysis Five Forces analysis

None of these

Fones Inc. and Speed Dial Corp. are two competitors in the mobile phone market. The cost incurred by each company to manufacture smartphones is $200 per unit. Although both the companies sell their smartphones at the same price, Speed Dial Corp. has a larger market share in the smartphone industry. What does this imply?

Speed Dial Corp. has been able to offer more perceived value than Fones Inc.

________ is an important tool because it allows a manager to recognize, prioritize and address the needs of various stakeholders.

Stakeholder impact analysis

All of the following are examples of internal stakeholders except. Multiple Choice employees. stockholders. board members. suppliers.

Suppliers

Which of the following is not one of the VRIO characteristics of competitive advantage? Multiple Choice variable rare costly to imitate organized to capture value

Variable

Let's Talk Corp. is a public company whose shares are currently trading in the market at $150 each. The company manufactures smartphones at the cost of $300 per unit and sells them in the market for $500 each. What is the company's producer surplus?

$200

EatNow is a fast-food restaurant that has recently entered the hospitality industry. Since most of its competitors are pursuing a low-cost position and doing well, EatNow also wants to adopt the same strategy. Which of the following will be a likely implication of this decision?

EatNow will face low profit potential.

All of the following below are examples of external stakeholders except Multiple Choice employees. government. communities. customers.

Employees

Which of the following real-world examples best supports the statement that strategic commitments to a specific industry may be the result of political rather than economic considerations?

A number of European governments created Airbus through direct subsidies to provide a countervailing power to Boeing.

Which of the following statements related to a firm's stakeholders is not true? -While external stakeholders are those who make contributions toward the firm, internal stakeholders are those who reap all the benefits. -If internal or external stakeholders withhold participation in the firm's exchange relationships, it can have severe negative performance implications. -A firm's stakeholders include organizations and groups along with individuals who can affect or be affected by the firm's actions. -Effective stakeholder management is an example of how managers can act to enhance a firm's competitive advantage.

While external stakeholders are those who make contributions toward the firm, internal stakeholders are those who reap all the benefits.

In which of the following cases was a company at a major competitive disadvantage?

Without a clear strategic position, Sears tried to be too many things for too many types of customers.

Which of the following firms most likely has the lowest bargaining power as a buyer?

a cell phone company that requires highly customized software for its phones

A firm's _______ are best described as distinct and fine-grained business processes such as order taking, physical delivery of products, or invoicing customers.

activities

Generally speaking, which of these situations is likely to lead to greater profits?

an industry with fewer but larger competitors

In a perfectly competitive industry structure.

any competitive advantage that one firm has will be short-lived.

In the dynamic capabilities perspective, for an asset or a capability to be included in a firm's resource stock, it should be

built through investments over time.

The viability of a differentiation strategy is severely undermined when the

differentiated products become commoditized throughout the industry.

In the ________, firms change the underlying technology while holding cumulative output constant.

experience curve

A fragmented industry turns into a consolidated industry when

firms reduce competition within the industry through mergers and acquisitions.

Hit Me Up is an instant messaging mobile application. Users have access to a basic version with limited message recipients for free, but they have to pay a fee to have unlimited message recipients or to use advanced features. Which of the following business models does this best illustrate?

freemium

Product-oriented vision statements provide managers with

goals to improve service.

The relative bargaining power of suppliers is most likely low when

incumbent firms face low switching costs when changing suppliers.

ABC Hardrives Inc., All Digital Inc., and FastFax Corp. are all companies that manufacture and sell consumer electronics. They procure their component parts from a similar set of suppliers in China and sell the final product to customers with similar needs. Thus, the three companies together are a part of a(n)

industry

Patents, designs, copyrights, trademarks, and trade secrets are five forms of

intellectual property

Which of the following is a stakeholder attribute that managers should consider at every step in a stakeholder impact analysis?

legitimacy

When an organization briefly describes what they do and how they do it, they have more than likely articulated their

mission statement

_________ are industry-specific factors that separate one strategic group from another.

mobility barriers

All of the following are tools primarily used to achieve cost-leadership except

offering products at a premium price.

According to the upper-echelons theory, Multiple Choice top managers of a company should isolate themselves from the organizational values. organizational outcomes reflect the values of the top management team. strong strategic leadership is solely the result of learning. strategic commitments made by upper-level managers are inexpensive and short-term.

organizational outcomes reflect the values of the top management team.

There exist important trade-offs between value creation and low cost because value creation and cost tend to be

positively correlated

A firm is likely to have a competitive advantage when it

provides services that consumers will value more than those of its rivals.

A firm that follows the differentiation strategy is protected from the threat of new entrants primarily due to its

reputation for quality.

According to the value chain analysis, which of the following is a support activity?

research and development

Which of the following does a firm possess when it can outperform other firms in the same industry or the industry average over a prolonged period of time?

sustainable competitive advantage

When a firm integrates the competitive strategies of cost-leadership and differentiation, it will most likely result in

trade-offs that work against each other.

A good strategy should be able to provide products and services to customers at an attractive price point while maintaining internal costs, resulting in

value creation

By selling a laptop at $1,200 for which consumers are willing to pay up to $1,300, a consumer electronics firm makes a profit of $500 per unit. What is the economic value created in this scenario?

$600

Oberlo Autos competes against the global leaders in the automobile industry by developing and selling acceptable quality vehicles at a lower price. This has been possible due to the company's large-scale production that reduces its manufacturing expenses. Which of the following generic business strategies is Oberlo Autos applying in this scenario?

Cost-leadership strategy

Which of the following statements is true of the Level-5 leadership pyramid?

Each level of leadership builds upon the previous one in the pyramid.

Ez Solutions Inc. has been operating in the country of Jamtland for almost a decade. The nation is currently experiencing an economic downturn. Which of the following is the most likely benefit of this economic condition for Ez Solutions Inc.?

Ez Solutions Inc. will have better access to highly skilled human capital at a lower cost.

FL Systems Inc. and Oryxo Systems Inc. are two competing firms. FL Systems Inc. has $300,000 in tangible assets and $200,000 in intangible assets. Oryxo Systems Inc. has $150,000 in tangible assets and $347,000 in intangible assets. In the context of the resource-based view, which of the following is the most likely implication of the asset values of the two companies?

FL Systems Inc. will find it harder than Oryxo Systems Inc. to attain competitive advantage.

Which of the following is a feature of a fragmented industry?

It consists of many small firms.

Which of the following statements is true of customer-oriented visions?

They define a business in terms of providing solutions to people's needs.

When using the balanced scorecard approach to assess a firm's performance, which of the following is not a key question that managers need to answer? How do customers view us? How do we create value? What intangible assets do we need? How do shareholders view us?

What intangible assets do we need?

The tenet behind the triple bottom line is that

a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy.

How has Walmart staked out a unique strategic position?

by cutting costs to offer lower prices than competitors

There are several cost drivers that can be managed in order to establish a low-cost leadership advantage. One of the primary cost drivers is

combining experience-based learning and process innovation to move onto a steeper learning curve.

In the context of the SWOT matrix, which of the following best exemplifies an external opportunity for a firm?

decreasing government interference in the target market

The pattern of faulty and biased decision making that occurs in groups whose members strive for agreement at the expense of good decision making is called

groupthink

Economic contribution is created when the

price a customer is willing to pay for a good or service is more than the cost the firm incurs to produce it.

Which of the following is an example of a firm's capabilities? Multiple Choice routine activities performed in the firm, like physical delivery of products specific tasks involved in the invoicing of customers assets such as plant and machinery owned by the firm skills involved in training and managing a workforce

skills involved in training and managing a workforce

GiftBasket.com has successfully created a higher perceived value in the e-commerce industry, though it offers the same products at slightly higher prices than the competitors. This has been mainly attributed to the company's easy-to-navigate website, simple return procedures, fast delivery, and cash on delivery option. Thus, the value driver for GiftBasket.com is its

superior customer service

If a firm is not effectively organized to exploit the competitive potential of a valuable, rare, and costly to imitate (VRI) resource, the best case scenario is

temporary competitive advantage

When a company makes improvements in its social, economic, and ecological performance, it is adopting a ________ approach to assessing competitive advantage..

triple bottom line

The _______ describes the internal activities a firm engages in when transforming inputs into outputs.

value chain view

The two primary competitive levers that managers can use in order to answer the question of how to compete are

value, cost

As differentiation and cost-leadership are distinct strategic positions that require important trade-offs, it is

quite difficult to translate a blue ocean strategy into reality.

Which of the following statements is true of strategy? Multiple Choice Statements of desire, on their own, are strategy. Tactical tools that are a part of a firm's functional and global initiatives are strategy. Operational effectiveness and competitive benchmarking are strategy. Actions that allow a firm to address a competitive challenge are strategy.

Actions that allow a firm to address a competitive challenge are strategy.

Which of the following groups is most likely to be considered a firm's internal stakeholder? Multiple Choice creditors customers alliance partners board members

Board members

Some scholars have added a sixth force to Porter's Five Forces model. This sixth force, ________, is believed to add value to the original product offering (or service) when the two are used in tandem.

Complement

Delish Corp is a chain of supermarkets that sells its fruits and vegetables at higher prices than its competitors. Yet, the supermarket chain has a large customer base due to its wide product portfolio and superior customer service. Which of the following generic business strategies has Delish Corp adopted in this scenario?

Delish Corp is probably pursuing a differentiation strategy.

What questions would a firm's business strategy ideally answer?

How should we compete?

Which of the following is not true concerning a customer-oriented mission? It defines the means of how a customer need will be met. It has more flexibility than a product-oriented mission. It has a higher likelihood of remaining relevant in the long-term. Organizations that have customer-oriented missions are more likely to be successful.

It defines the means of how a customer need will be met.

Which of the following is not a disadvantage of the balanced scorecard approach? -It is a tool merely for strategy implementation, not for strategy formulation. -It fails to allow managers to prepare the company for future growth. -It fails to provide much insight into how metrics that deviate from the set goals can be put back on track. -It provides only limited guidance about which metrics to choose to measure competitive advantage

It fails to allow managers to prepare the company for future growth.

Which of the following statements accurately brings out the difference between economies of scale and learning effects

Learning effects occur over time, whereas economies of scale are captured at one point in time when output is increased.

Let's Roll Inc. and Ride 4 Ever Cycles Inc. are two competing motorcycle companies. While Let's Roll's Cost of goods sold/Revenue is 63.4 percent, the Cost of goods sold/Revenue of Ride 4 Ever Cycles is 54.2 percent. What do you infer from this financial data?

Let's Roll is less efficient than Ride 4 Ever Cycles in producing goods

Though the microwaves manufactured by Nuked Inc. and Hot Box Inc. sell at the same price of $600 per unit, the economic value created by Nuked Inc. is more than that of Hot Box Inc. In the context of this scenario, which of the following statements is true?

Nuked has a relative cost advantage over Hot Box Inc..

If a company chooses to keep its vision customer-oriented rather than product-oriented, what will be the implication of that decision?

The company will tend to be more flexible when adapting to changing environments.

While most of Savvy Inc.'s competitors were moving toward developing and emerging markets, Savvy Inc. decided to keep its operations limited to its home country so that it could gain some advantage. A few years later, however, Savvy Inc. lost its footing in the home market due to a sharp fall in demand. It then decided to invest in large-scale operations in the same developing nations as its competitors, within a short period of six months. However, its costs kept increasing, so it could not compete against the already established brands. In this scenario, the failure of Savvy Inc. can be best attributed to

Time compression diseconomies

Evaluating the data collected from environmental analysis, the corporate executives of BigPharma Inc. realized that it was the right time to expand the business. The company's vision was accordingly adjusted from "To Be the Best in the Pharmaceutical Industry" to "To Make Good Health Accessible to Everyone around the Globe." To support the new vision, the executives decided that the company would first enter the Asian market where its growth potential would be huge. To further support these decisions, the general managers of different SBUs and the functional managers formulated their own strategies. Which of the following approaches to the development of strategy does this best illustrate?

Top- down strategic planning

Which of the following statements accurately brings out the difference between an organization's vision and mission?

Vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished.

Organizational core values are the answer to which of the following questions?

What commitments do we make to act both legally and ethically?

In the 1980s, Japanese competitors brought better-quality chips to the market at lower cost, threatening Intel Corporation's position and strategic plan regarding the production of DRAM (dynamic random-access memory) chips. When the functional managers at Intel came up with the simple rule of producing whichever product delivered the higher margin, the front-line managers shifted Intel's production capacity away from the lower-margin DRAM business to the higher-margin semiconductor business. This ________ emerged as a consequence of the firm's resource allocation process.

bottom-up strategy

Strategic-group mapping establishes that

competitive rivalry is strongest between firms that are within the same strategic group.

William estimated that a pair of Perfect Fit jeans would be worth $60 for its brand and durability. However, at the Perfect Fit store, the pair of jeans he wanted was available for $45. The difference of $15 in this scenario is referred to as the

consumer surplus

_________ is best described as the difference between the value a consumer attaches to a good or service and what he or she paid for it.

consumer surplus

According to the Level-5 leadership pyramid, the Level 2 manager is a(n)

contributing team member

Which of these is a way to reconfigure a value chain?

entering an industry by offering sporting events on streaming video when competitors are offering them through cable hookups

The metaphor of a black swan best applies to

events that are considered highly unexpected and highly impactful when they do occur.

MicroChips Corp. is a company that supplies microprocessors to 2020 Processors Inc., a computer hardware company. When 2020 Processors Inc. demands lower prices for the microprocessors, MicroChips Corp. makes it clear that it would profit more from launching its own brand of laptops and desktops in the market. Fearing the competition it would then face from MicroChips Corp., 2020 Processors Inc. decides to buy the microprocessors at the quoted price itself. In this scenario, MicroChips Corp., as a supplier, has exercised its bargaining power by threatening to

forward integrate.

According to the resource-based view, a firm's competitive advantage often stems from its ___________ opposed to its ___________.

intangible resources; tangible resources

The amount that savers are paid for use of their money and the amount that borrowers pay for that use is best described as a(n)

interest rate

One major limitation of using shareholder value appreciation as a measure for assessing competitive advantage is that stock prices often times reflect the irrational and psychological mood and behaviors of investors. Alan Greenspan, former head of the Federal Reserve referred to this as

irrational exuberance

An experience curve attempts to capture both

learning effects and process improvements.

The cost-leadership strategy helps a firm achieve competitive advantage when it does which one of the following?

permits a firm to perform similar activities differently than its rivals with resulting lower costs

Even though Easy Speak Inc. and KM Com Inc. operate in the same industry—telecommunications—each firm has a different and loyal customer base. While Easy Speak Inc. attracts young students and professionals through its efficient network coverage and pricing, KM Com Inc. attracts elderly customers solely due to its excellent customer service. Thus, both firms draw their strengths from distinct resource bundles. Which of the following assumptions of the resource-based model of competitive advantage does this scenario best illustrate?

resource heterogeneity