MGMT 4312 Quizzes

The only person in a functional organization who has to have a multifunctional perspective is the

CEO

____ is/are the distribution of individuals in a society in terms of age, sex, marital status, income, ethnicity, and other personal attributes that may determine buying patterns

Demographics

One of the first scholars to examine the longevity of competitive advantage was

Dennis Mueller

Which of the following statements is accurate?

In general, both economies of scale and diseconomies of scale are relatively easy-to-duplicate bases of cost leadership

Which of the following statements regarding substitutes is accurate?

In the extreme, substitutes can ultimately replace an industry's products or services

Which of the following statements regarding firm mission is accurate?

While some firms have used their missions to develop strategies that create significant competitive advantages, firm missions can hurt a firm's performance as well

Actions firms take to gain competitive advantages in a single market or industry are known as

business level strategies

If Sematech were to choose to narrow its product line in an effort to reduce costs, this would be an example of

a policy choice

If the average ROE in the heating and cooling industry is 10.1%, and Thermacorp's ROE is 17.3%, Thermacorp is said to have

above average accounting performance

Using ratio analysis, a firm earns ____ when its performance is greater than the industry average

above average accounting performance

Accounts receivable turnover is an example of which type of ratio?

activity

Which of the following is a reason why it is important for students to study strategy and the strategic management process? studying strategy and the strategic management process can give students tools to evaluate the strategies of firms that may employ them. It can be very important to a new hire's career success to understand the strategies of the firm that hired them and their place in implementing these strategies. While strategic choices are generally limited to very experienced senior managers in large organizations, in smaller and entrepreneurial firms many employees end up being involved in the strategic management process. All of these

all of these

The products or services provided by a firm's direct competitors meet ______ customer needs in _____ ways as the product provided by the firm itself

approximately the same; the same

Thermacorp's weighted average cost of capital is 13.5. If the average WACC in the heating and cooling industry is 19, Thermacorp can be said to be earning

below normal economic performance

Which of the following is an example of formal management controls?

budgeting and reporting activities

Actions that firms take to gain competitive advantage in a single market or industry are known as

business-level strategies

If your customers value your products more when they have your product and another firm's product rather than when they have your product alone, the other firm is considered to be a

complementor

Within the five forces framework, the five most common threats facing firms from their competitive environment include each of the following except

complementors (they do include: substitutes, suppliers, buyers)

Actions firms take to gain competitive advantages by operating in multiple markets or industries simultaneously are known as

corporate level strategies

Green Frog is an environmentally friendly firm in the cosmetics industry. If Green Frog were considering expanding beyond the cosmetics industry into pharmaceuticals in order to gain competitive advantages by operating in multiple markets and industries, this would be an example of which type of strategy?

corporate level strategy

The ______ is the rate of return that a firm promises to pay its suppliers of capital to induce them to invest in the firm

cost of capital

Sematech is a producer of computer chips. To gain an advantage over other computer chip makers, Sematech focuses on reducing its costs below all of its competitors and has aligned its value chain accordingly. Recently, several of Sematech's competitors have begun to reduce the company's competitive advantage. In response to this threat, Sematech has decided to add production capacity in an effort to lower costs. Sematech is pursuing which strategy?

cost-leadership business strategy

The values, beliefs and norms that guide behavior in a society are known as

culture

Factors such as BidBuy's feedback rating system that are valuable to the company's customers but which are not useful on other online auction sites are examples of

customer-switching costs

The strategic management process begins when a firm

defines its mission

Green Frog is an environmentally friendly firm in the cosmetics industry that has decided to undertake a strategic planning project. It wants to ensure that it performs the process correctly and so intends to start the process with the first step of the strategic planning process, which is

defining its mission

As the volume of production in a firm increases, the average cost per unit decreases until some optimal volume of production is reached, after which the average costs of production begin to rise because of

diseconomies of scale

_____ measures of competitive advantage compare a firm's level of return to its cost of capital instead of to the average level of return in the industry

economic

The difference between the perceived benefits gained by a customer who purchases a firm's products or services and the full economic cost of these products or services is the

economic value

_____ are said to exist when the increase in firm size (measured in terms of volume of production) are associated with lower costs (measured in terms of average costs per unit of production)

economies of scale

When managers committed to an incorrect course of action increase their commitment to this action even as its limitations become manifest, this is known as

escalation of commitment

By conducting a(n) _____, a firm identifies the critical threats and opportunities in its competitive environment

external analysis

Green Frog is an environmentally friendly firm in the cosmetics industry. If during the strategic planning process Green Frog tried to determine the critical threats and opportunities in its competitive environment, it would be performing a(n)

external analysis

If in the process of maximizing its performance, a firm engages in activities that pollute the environment, the impact of that pollution is a(n)

externality

According to the research in strategic human resources management

firms that are able to use human resource practices to develop socially complex human and organizational resources are able to gain competitive advantage over firms that do not engage in these practices

A consolidation strategy is a good option in what type of industry?

fragmented

If Lucy Sullivan were a Sematech maager who oversaw the finance operations in the company's functional structure, Lucy would be considered a

functional manager

In a functional structure, each of the major business functions is managed by a

functional manager

Frequent price cutting by firms in an industry, frequent introduction of new products by firms in an industry and intense advertising campaigns are indications of

high levels of direct competition

Bates' culture is an example of a(n)

informal management control

The Bates Company has been producing tools for over fifty years. In that time the company has been acknowledged as a producer of high quality tools at a reasonable recognized early in its development that tools made from specific blends of various types of metal were less costly to produce and had superior performance compared to traditional metals. Accordingly, Bates made investments in developing tools made for specialty metals long before other competitors and has made a series of investments over its operating history that have put it far ahead of tis competitors in terms of product development. Industry analysts believed that based on these investments it would be difficult and extremely costly, if it were even possible, for rivals to catch up with Bates. Second, in recognizing the importance of certain metals, Bates was able to sign long-term contracts with suppliers of the metals that have provided Bates with a lasting cost advantage. Finally, Bates maintains its cost advantages by using a thorough budgeting and reporting system that allows it to closely control costs, and these systems are supported by a frugal company culture and financial incentives that reward employees for finding ways to save money throughout the company. The budgeting and reporting activities that Bates uses are examples of

informal management controls

Fed Ex entered their market with a well-defined mission and objectives, making strategic choices and implementing those strategies. This is an example of which type of strategy?

intended

In order to create a cost advantage, the cost of acquiring low-cost productive inputs must be ______ the cost savings generated by these factors

less than

By employing a low-cost competitive strategy, Sematech has made itself

less vulnerable to the power of suppliers

Ratios that focus on the level a firm's financial flexibility, including its ability to obtain more debt, are known as

leverage ratios

Which type of ratios on the ability of a firm to meet its short-term financial obligations?

liquidity ratios

Hickory Divine is one of the leading manufacturers in the hardwood furniture industry. Hickory Divine has many small competitors, none of which controls a significant portion of the industry. Hickory, like most of the furniture manufacturers, sells its products to a broad variety of small furniture stores throughout the country, none of which represents a large percentage of Hickory's sales. When purchasing the products it uses for manufacturing its furniture, Hickory is able to choose from many suppliers since the wood it uses is an undifferentiated commodity, and Hickory is able to easily switch to any supplier that has the best price and delivery times. While growth in the hardwood furniture industry has historically been in the double digits, the industry growth rate has slowed considerably into the single digits, to approximately 5% in recent years; consumers have been purchasing less expensive furniture made of composite wood that is considerably less expensive than hardwood furniture but that looks and functions very similarly once it is painted. The threat of suppliers in the hardwood furniture can best be described as

low because there are a large number of suppliers selling an undifferentiated product

The threat of suppliers in the hardwood furniture can best be described as

low because there are a large number of suppliers selling an undifferentiated product

A firm that earns its cost of capital is said to be earning

normal economic performance

______ are specific measurable targets a firm can use to evaluate the extent to which it is realizing its mission

objectives

BidBuy is the world's leading online auction company. When Bidbuy was founded ten years ago it was the first online auction company, and it has been the leader since it was founded. Although there are other firms in the industry, BidBuy controls over 75% of the market. One of the aspects of BidBuy that keeps users from changing to other online auction companies is the large user base BidBuy has built and a feedback rating system transaction. This allows users to build a reputation for honesty and trustworthiness. Sellers with a high feedback rating tend to receive more bids on their auctions and a higher price for their goods. To help facilitate payment transfers between buyers and sellers following successful online auctions, companies such as a DollarDog have been founded, and these companies have facilitated growth for BibBuy. Having attained a 75% market share in the US, BidBuy has begun expanding internationally, opening its own sites in some countries and purchasing incumbents in others. In its international expansion, BidBuy has allowed its individual companies to customize their offerings according to the needs and desires of the countries in which they operate and when these companies are successful, BidBuy works to transfer these successful capabilities throughout the firm. Which of the following best describes the competition in the US online auction industry?

oligopoly

Which of the following statements regarding patents is accurate?

patents may decrease, rather than increase, the costs of imitation

A process is said to be ____ when events early in the evolution of a process have significant effects on subsequent events

path dependent

Computer hardware and software technology, robots used in manufacturing and automated warehouses are exampled of which type of resources?

physical resources

LaserTech is a manufacturer of industrial lasers and has developed a new, patented technology that allows its customers to manufacture their products more precisely with a higher level of consistency and at a lower cost than they could previously. LaserTech's executives believe that no rivals have a similar technology and that it would be very difficult for rivals to copy this technology since the benefits of the new technology can only be realized within LaserTech's system, which includes processes that are protected by trade secrets, making it difficult for rivals to understand the relationship between the company's new technology and its competitive advantage. LaserTech's new technology is an example of

physical resources

An important limitation of comparing a firm's performance to its cost of capital occurs when a firm is

privately held

Firms implementing cost-leadership strategies will have ______ layers in their reporting structure

relatively few

The view that equity holders only receive payment on their investment in a firm after all legitimate claims by a firm's other stakeholders are satisfied is known as the ____ view of equity holders

residual claimants

The VRIO assumption that some of the resource and capability differences among firms may be long lasting because it may be very costly for firms without certain resources and capabilities to develop or acquire them is known as

resource immobility

By increasing production volume in an effort to reduce costs, Sematech is pursuing which sources of cost advantage?

size differences and economies of scale

Which of the following statements regarding competitive parity and competitive advantage is accurate?

some firms develop valuable, rare, and costly-to-imitate resources and capabilities in being efficient second movers, that is, in rapidly imitating and improving on the product and technological innovations of other firms

A sequential set of analyses and choices that can increase the likelihood that a firm will choose a strategy that generates competitive advantages is the

strategic management process

_________ occurs when a firm adopts organizational policies and practices that are consistent with its strategy

strategy implementation

To the extent that a firm's resources and capabilities enhance a firm's competitive position by enabling a firm to exploit it opportunities or neutralize its threats, these resources and capabilities are valuable and are known as

strengths

From 1926 to 1995, visionary firms earned _____ returns compared to firms that were not visionary firms

substantially higher

____ make a wide variety of raw materials, labor and other critical assets available to firms

suppliers

Firms that possess and exploit costly-to-imitate, rare and valuable resources in choosing and implementing their strategies may enjoy a period of

sustained competitive advantage

Machines and robots are examples of

technological hardware

If there is a conflict between the resources a firm controls and that firm's organization, _____ should be changed

the organization

Overall, the average level of performance in an industry is likely to be highest when

the threat level of all five forces is low

In general, first-move advantages can arise from any of these sources except

using an imitative strategy to introduce improved versions of competitor's new products

Resources that generate a temporary competitive advantage are

valuable and rare but not costly to imitate