MGT

Maquiladoras are manufacturing plants owned by _____________ operated in __________ near the _________ border. A. non-Canadian firms; Canada; U.S. B. non-Mexican firms; Mexico; U.S. C. non-U.S. firms; U.S.; Mexican D. Mexican firms; U.S.; Canadian

B

More recent work in the area of strategic management regarding Porter's assertion about being stuck in the middle A. supports Porter's argument that firms that attempt to simultaneously pursue cost leadership and product differentiation will find themselves at a competitive disadvantage. B. contradicts Porter's argument and finds that firms that successfully pursue cost leadership and product differentiation simultaneously can often expect to gain a sustained competitive advantage. C. partially contradicts Porter's argument and finds that firms that successfully simultaneously pursue cost leadership and product differentiation can only expect to gain a temporary competitive advantage. D. partially contradicts Porter's argument and finds that only firms in certain select industries can successfully simultaneously pursue cost leadership and product differentiation and gain a temporary competitive advantage.

B

Perhaps the only time economies of scale are not subject to low-cost duplication is when the ______________ size of operations is a significant percentage of __________ in an industry. A. minimum; marginal demand B. efficient; total demand C. maximum; marginal demand D. efficient; marginal demand

B

Small entrepreneurial firms A. have numerous bureaucratic controls that impede cross-functional communication, and thus slow innovation. B. have relatively few bureaucratic controls which allow information and ideas to flow freely and to facilitate innovation. C. have relatively few bureaucratic controls which impedes cross-functional communication, and thus slow innovation. D. have numerous bureaucratic controls but information and ideas still flow freely and facilitate innovation

B

The price premium that customers are willing to pay for the superior quality and perceived prestige of Coach's products over the prices of similar products are known as A. marginal prices. B. hedonic prices. C. heroic prices. D. elastic prices

B

The quality of relations among labor and management, an organization's culture, and the quality of management controls are all examples of A. technological hardware. B. technological software. C. productive inputs. D. economies of scale

B

Which bases of product differentiation is by far the most popular way for firms to try to differentiate their products but is identified as almost always being easy to duplicate? A. Product mix B. Product features C. Customization D. Distribution channels

B

Which of the following bases of product differentiation attempts to create the perception that a firm's products or services are unusually valuable by focusing on the relationship between a firm and its customers? A. Linkages between functions B. Product customization C. Location D. Product complexity

B

Which of the following bases of product differentiation attempts to create the perception that a firm's products or services are unusually valuable by focusing on links within and between firms? A. Reputation B. Product complexity C. Consumer marketing D. Product mix

D

Which of the following is less likely to be a rare source of cost advantage? A. Technological software B. Learning-curve advantages C. Differential low-cost access to productive inputs D. Policy change

D

Which of the following is not a potential source of diseconomies of scale? A. Physical limits to efficient size B. Worker de-motivation C. Distance to markets and suppliers D. Learning-curve economies

D

Which of the following is not one of the six distinct activities in McKinsey and Company's value chain model? A. Technology development B. Product design C. Manufacturing D. Inbound logistics

D

Which of the following statements is accurate? A. In general, economies of scale are relatively easy-to-duplicate bases of cost leadership, but diseconomies of scale are not. B. In general, diseconomies of scale are relatively easy-to-duplicate bases of cost leadership, but economies of scale are not. C. In general, neither economies of scale nor economies are relatively easy-to- duplicate bases of cost leadership. D. In general, both economies of scale and diseconomies of scale are relatively easy- to-duplicate bases of cost leadership.

D

Which of the following statements regarding the resource based view is accurate? A. Competitively valuable resources and capabilities are controlled only by a firm's general managers. B. Only lower level employees need to accept the responsibility of creating, nurturing and exploiting resources and capabilities that can generate competitive advantages for a firm. C. Employees should define their jobs in functional terms instead of in competitive and economic terms. D. Competitive advantage is too important to remain the sole property of senior management.

D

______________ implies that for a given business activity, some firms may be more skilled in accomplishing this activity than other firms. A. Resource mobility B. Resource homogeneity C. Resource immobility D. Resource heterogeneity

D

If Delta Airlines were to significantly change its fare structure and flight schedule to enhance its competitive position in response to aggressive price cutting by Southwest Airlines, this would be an example of A. explicit collusion. B. tacit collusion. C. competitive dynamics. D. a harvest strategy

c

LaserTech's new technology is an example of A. financial resources. B. physical resources. C. human resources. D. organizational resources

B

According to one estimate, the minimum efficient scale of a single compact-car manufacturing plant is 400,000 units per year; this implies that firms operating in this industry are likely to expand internationally to A. increase sales to realize manufacturing economies of scale. B. gain access to low cost labor. C. gain low cost access to raw materials. D. decrease manufacturing size to avoid diseconomies of scale

A

According to the research in strategic human resources management A. 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. B. firms that are able to use human resource practices to develop socially simplistic human and organizational resources are able to gain competitive advantage over firms that do not engage in these practices. C. firms that are able to use human resource practices to develop socially complex human and organizational resources gain little advantage over firms that do not engage in these practices. D. firms that are able to use human resource practices to develop socially complex human and organizational resources are at a competitive disadvantage when compared to firms that do not engage in these practices.

A

Any actions a firm takes that have the effect of reducing the level of rivalry in an industry that also do not require firms in an industry to directly communicate or negotiate with each other can be thought of as A. tacit cooperation. B. tacit collusion. C. explicit collusion. D. competitive parity

A

Bates' culture is an example of a(n) A. informal management control. B. formal management control. C. compensation policy. D. formal reporting structure

A

Chapter 4: Cost Leadership 70. Cost advantages based on learning curve economies are A. rare, but they are usually not costly to duplicate. B. costly to duplicate, but they are usually not rare. C. both rare and usually costly to duplicate. D. not rare and are usually not costly to duplicate

A

If Sematech decided to focus on building its technological hardware, it would focus on elements such as A. robots. B. organizational culture. C. the quality of organizational controls. D. the quality of relations among labor and management

A

If one of LaserTech's rivals were to decide to divest its industrial laser manufacturing business in response to LaserTech's new technology this would be an example of A. competitive dynamics. B. tacit collusion. C. a sustainable distinctive competence. D. competitive parity.

A

In a functional structure, each of the major business functions is managed by a A. functional manager. B. divisional manager. C. chief executive officer. D. line manager.

A

Most firms have a resource-base that is composed primarily of resources and capabilities that are A. valuable but not rare. B. neither valuable nor rare. C. valuable and rare. D. rare but not valuable.

A

Resources and capabilities, such as relations among managers and a firm's culture, that may be costly to imitate because they are beyond the ability of firms to systematically manage and influence are referred to as A. socially complex. B. casually ambiguous. C. path dependent. D. the result of unique historical conditions

A

Sematech is pursuing which strategy? A. Cost-leadership business strategy B. Product differentiation business strategy C. Cost-leadership corporate strategy D. Product differentiation corporate strategy

A

The Lockheed Corporation Skunk Works is an example of a A. cross-divisional or cross-functional team. B. M-form structure. C. U-form structure. D. multi-divisional structure.

A

The _________ strategy treats its international operations as an integrated network of distributed and interdependent resources and capabilities. A. transnational B. global C. international D. multi-domestic

A

The fact that it would be would be difficult and costly for firms to match Bates' capabilities in the tool industry indicates that these capabilities are A. imperfectly imitable. B. casually ambiguous. C. substitutable. D. perfectly imitable

A

The inability of rivals to develop or acquire technology similar to that of LaserTech is an illustration of A. resource immobility. B. resource heterogeneity. C. causal ambiguity. D. path dependence.

A

Under which of the following conditions is the product mix advantage as a basis of product differentiation the least difficult to duplicate? A. When the base of a product mix advantage is a common customer B. When the mix of products is highly integrated with each other C. If each of the products in a product mix has unique features D. If a firm brings a series of products to market

A

Which of the following bases of product differentiation attempts to create the perception that a firm's products or services are unusually valuable by focusing directly on the attributes of the products or services a firm sells? A. Product complexity B. Product customization C. Consumer marketing D. Reputation

A

Which of the following bases of product differentiation is almost always easy to duplicate? A. Product features B. Product mix C. Product customization D. Consumer marketing

A

Which of the following is likely to be a rare source of cost advantage? A. Technological software B. If the efficient size of a firm or plant is significantly smaller than the total size of an industry C. Cost disadvantages based on diseconomies of scale D. Technological hardwar

A

Which of the following statements about cost leadership and the threat of buyers is accurate? A. If buyers demand increased quality or service, cost leaders can absorb these costs and may still have a cost advantage over the competition. B. Being a cost leader encourages buyer backward vertical integration. C. Firms pursuing a cost-leadership strategy are especially vulnerable to powerful buyers who insist on low prices or higher quality and service from their suppliers. D. Cost leaders are not able to absorb costs associated with buyers' demands for increased quality or service.

A

Which of the following statements regarding competitive parity and competitive advantage is accurate? A. Some firms develop valuable, rare, and costly-to-imitate resource and capabilities in being efficient second movers-that is, imitating and improving on the product and technological innovations of other firms. B. Firms that benchmark their performance against the performance of successful competitors can expect to develop at least a temporary competitive advantage. C. Firms must be first movers to gain competitive advantages. D. Even if all a firm does is create value in the same way as its competitors, the firm can expect to earn at least a temporary competitive advantage.

A

Which of the following statements regarding the impact of product differentiation on the threat of new entry is accurate? A. Product differentiation helps reduce the threat of new entry by forcing potential new entrants to absorb costs associated with overcoming incumbent firms' product differentiation advantages. B. Product differentiation increases the threat of new entry by allowing potential new entrants to avoid costs associated with overcoming incumbent firms' product differentiation advantages. C. Product differentiation has no impact on the threat of new entry. D. It is not possible to determine the impact of product differentiation on the threat of new entry.

A

With regard to the threat of suppliers, product differentiation A. reduces the threat of suppliers because a firm with a highly differentiated product can pass increased costs on to customers. B. increases the threat of suppliers because a firm with a highly differentiated product is unable to pass increased costs on to customers. C. has no impact on the threat of suppliers. D. can either increase or reduce the threat of suppliers

A

___________ focus(es) on the relationship between the volume of production and a given point in time and average unit costs, the ______________ focus(es) on the relationship between cumulative production and average costs. A. Economies of scale; learning curve B. Competitive advantage; economies of scale C. Learning curve; economies of scale D. Economies of scale; competitive advantage

A

_______________ is the ability to use organizational structure to facilitate coordination among specific disciplines to conduct research. A. Architectural competence B. Cross functional linking C. Organizational coordination D. Managerial leverage

A

According to Chamberlin, firms selling differentiated products and facing a down- ward sloping demand curve are in an industry described as A. perfect competition. B. monopolistic competition. C. oligopolistic competition. D. semi-structured competition

B

Chapter 3: Evaluating a Firm's Internal Capabilities 61. If a firm's resources and capabilities are costly to imitate because imitating firms may not understand the relationship between the resources and capabilities controlled by a firm and that firm's competitive advantage, this competitive advantage is said to be protected from imitation by A. path dependence. B. casual ambiguity. C. unique historical conditions. D. social complexity

B

Choices that firms make about the kinds of products and services they will sell that impact their relative cost position are known as A. technological hardware. B. policy choices. C. technological software. D. corporate level strategies.

B

Computer hardware and software technology, robots used in manufacturing and automated warehouses are examples of which type of resources? A. Financial resources B. Physical resources C. Human resources D. Organizational resources

B

Each of these is one of the three critical determinants of the firm's ability to develop new resources and capabilities through its international operations except A. the intent to learn. B. having a sustained competitive advantage in its home market. C. the transparency of learning partners. D. the receptivity to learning.

B

Given Sematech's business level strategy, which organizational structure is the most appropriate? A. Matrix structure B. U-form structure C. Multi-divisional structure D. Product-divisional structure

B

If Sematech were to choose to narrow their product line in an effort to reduce costs, this would be an example of A. technological software. B. a policy choice. C. a competitive advantage. D. a learning curve effect

B

If Sematech's expansion plans did not produce the desired cost savings but the company decided to continue production expansion in an effort to capture cost reductions, this would be an example of A. economies of scale. B. escalation of commitment. C. diseconomies of scale. D. managerial diseconomie

B

In emerging industries A. firms that are first movers are unlikely to gain product differentiation advantages based on buyer loyalty and high switching costs. B. firms that are first movers can gain product differentiation advantages based on perceived technological leadership. C. product differentiation efforts are focused on product refinement as a basis of product differentiation. D. firms can sometimes be tempted to exaggerate the extent to which they have refined and improved their products and services.

B

Which of the following statements is accurate? A. A cost-leadership competitive strategy increases the threat of new entrants by lowering cost-based barriers to entry. B. Firms with a low-cost position can reduce the threat of rivalry in an industry. C. Cost leaders are especially vulnerable to substitute products. D. Cost leaders are especially vulnerable to the threat of suppliers

B

Which of the following statements regarding the learning curve and economies of scale is accurate? A. Just as diseconomies of scale are presumed to exist if a firm gets too large, there is a corresponding increase in costs in the learning-curve model as the cumulative volume of production grows. B. Where diseconomies of scale are presumed to exist if a firm gets too large, there is no corresponding increase in costs in the learning-curve model as the cumulative volume of production grows. C. Where diseconomies of scale are presumed to exist if a firm gets too small, there is no corresponding increase in costs in the learning-curve model as the cumulative volume of production grows. D. Just as diseconomies of scale are presumed to exist if a firm gets too small, there is a corresponding increase in costs in the learning-curve model as the cumulative volume of production grows.

B

According to the "two-thirds rule," it would cost a firm ___________ to build a plant with a capacity of 100,000 units. A. 2/3*100,000 B. 100,000 / 2/3 C. 100,000 raised to the 2/3 power D. 2 * 100,000 / 3

C

By employing a low-cost competitive strategy, Sematech has made itself A. less able to withstand industry price wars. B. more vulnerable to rivals. C. less vulnerable to the power of suppliers. D. more vulnerable to the power of buyers.

C

By increasing production volume in an effort to reduce costs, Sematech is pursuing which sources of cost advantage? A. Size differences and diseconomies of scale B. Differential access to productive inputs C. Size differences and economies of scale D. Technological advantages

C

Cost leadership and product differentiation strategies are so widely recognized that they are often called A. common business strategies. B. generic corporate strategies. C. generic business strategies. D. common corporate strategies.

C

Firms for whom the price of the products or services they sell is determined by market conditions and not by the individual decision of the firms are known as A. profit takers. B. price makers. C. price takers. D. profit makers.

C

Firms implementing cost leadership strategies will generally adopt a A. multi-divisional structure. B. product divisional structure. C. functional organizational structure. D. matrix structure.

C

If LaserTech's new technological development was due to proprietary investments the company made when it was first founded twenty years ago this would be an example of A. social complexity. B. tacit collusion. C. path dependence. D. causal ambiguity

C

If a resource or capability is valuable and rare but not costly to imitate, exploiting this resource will generate a(n) A. sustained competitive advantage. B. perfectly competitive environment. C. temporary competitive advantage. D. environment characterized by competitive parity.

C

If firms that do not possess resource or capabilities face a cost disadvantage in obtaining these resources or capabilities compared to the firms that already possess them, these resources and capabilities are termed A. rare. B. valuable. C. imperfectly imitable. D. perfectly imitable.

C

In Porter's value chain model, which of the following activities would be considered a primary activity? A. Technology development B. Human resource management C. Inbound logistics D. Product development

C

In developing a compensation policy used to implement a product differentiation strategy, firms will A. hold individuals responsible for experiments that fail. B. punish individuals for taking risks when their projects are not successful. C. simultaneously use multiple dimensions to examine employee performance. D. provide appropriate incentives for managers and employees to reduce costs.

C

It would be costly for competitors to duplicate Bates due to A. path dependence and causal ambiguity. B. causal ambiguity and unique historical conditions. C. path dependence and unique historical conditions D. casual ambiguity and patents

C

When considering the impact of product differentiation on the threat of rivalry, product differentiation A. reduces the threat of rivalry to zero. B. increases the threat of rivalry by forcing each firm in an industry to compete directly with one another instead of allowing them to carve out their own unique product niche. C. has no impact on the threat of rivalry. D. reduces the threat of rivalry because each firm in an industry attempts to carve out its own unique product niche

D

Research on architectural competence in pharmaceutical firms suggests that A. not only do some firms possess this competence, but that other firms do not; firms without this competence have, on average, been able develop it with minimal investment. B. very few firms possess this competence, but firms without this competence, on average, are able to develop it. C. not only do some firms possess this competence, but also that other firms do not and firms without this competence have, on average, been unable to develop it. D. virtually every firm possess this competence to some extent

C

Tacit cooperation is only a viable strategy when A. an industry is perfectly competitive. B. an industry is heterogeneous with respect to the products they sell and their cost structure. C. there is a strong market share leader in the industry. D. there are low entry barriers in the industry

C

The U-form structure used to implement a product differentiation strategy A. rarely uses temporary cross-divisional and cross-functional teams to manage the development and implementation of new, innovative, and highly differentiated products. B. has simple reporting relationships. C. often uses temporary cross-divisional and cross functional teams to manage the development and implementation of new, innovative, and highly differentiated products. D. has a small corporate staff

C

The VRIO assumption that some of the resource and capability differences among firms may be long lasting is known as A. resource mobility. B. resource homogeneity. C. resource immobility. D. resource heterogeneity.

C

The best example of a firm following a cost-leadership business strategy is A. Mercedes Benz. B. Macy's. C. Wal-Mart. D. Rolls Royce.

C

The budgeting and reporting activities that Bates uses are examples of A. informal management controls. B. formal reporting structures. C. formal management controls. D. primary value chain activities.

C

The fact that Nestlé has 8,000 brands of which only 750 are registered in more than one country, and only 80 of which are registered in more than 10 countries is an example of A. a cost leadership strategy. B. a globalization strategy. C. a locally responsive strategy. D. a niche strategy

C

To ensure that the different operations in an internationally integrated firm are appropriately coordinated, these firms typically manufacture more __________ products using more __________ components, than do locally responsive firms. A. specialized; standardized B. specialized; specialized C. standardized; standardized D. standardized; specialized

C

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 A. de-escalation of commitment. B. diseconomies of scale. C. escalation of commitment. D. economies of scale

C

Which generic business level strategy is Coach pursuing? A. Cost leadership B. Related diversification C. Product differentiation D. Unrelated diversification

C

Which of the following compensation policies is most likely to enhance a firm's ability to pursue a low cost strategy? A. Awarding employees bonuses based on the total amount of goods produced B. Awarding employees bonuses based on customer comment cards C. Awarding employees bonuses that are equal to 50% of the total cost savings achieved based on employee suggestions and initiatives D. Awarding employees bonuses based solely on how long they have been employed with the company

C

71. Resources and capabilities that are valuable, rare, and costly to imitate are best described as A. distinctive competencies. B. entry barriers. C. complimentary resources and capabilities. D. sustainable distinctive competencies.

D

A __________ exists when firms are committed to engage in several related product differentiation simultaneously. A. policy of substitution B. policy of extrapolation C. policy of exploration D. policy of experimentation

D

A ___________ structure exists when individuals in a firm have two or more bosses simultaneously. A. U-form B. multi-divisional C. cross-divisional D. matrix

D

A firm that chooses a ________ focuses on gaining advantages by reducing its cost below all of its competitors. A. diversification strategy B. product differentiation business strategy C. corporate strategy D. cost-leadership business strategy

D

When tacit cooperation has the effect of reducing supply and increasing prices, it is known as A. monopolistic competition. B. explicit collusion. C. competitive parity. D. tacit collusion

D

A firm that has a sustained competitive advantage in its domestic market A. can expect to have a sustained competitive advantage in all of the countries in which it competes. B. can expect to have at least a temporary competitive advantage in all of the countries in which it competes. C. can expect that resources that are valuable, rare and costly to imitate in one country will be valuable, rare and costly to imitate in other countries. D. can expect that resources that are valuable, rare and costly to imitate in one country may not be valuable, rare and costly to imitate in other countries.

D

A firm's marketing skills and teamwork as well as its cooperation among managers are examples of A. financial resources. B. human resources. C. physical resources. D. capabilities

D

Chapter 3: Evaluating a Firm's Internal Capabilities 88. The reward system Bates uses to encourage employees to find ways to reduce costs is an example of a(n) A. sustained distinctive competence. B. informal management control. C. formal reporting structure. D. compensation policy

D

Firms pursuing a cost leadership strategy are typically characterized by A. loose cost control systems. B. a de-emphasis on quantitative cost goals and costs. C. infrequent cost control reports. D. close supervision of labor, raw materials and inventory.

D

Firms that possess and exploit costly-to-imitate, rare and valuable resources in choosing and implementing their strategies may enjoy a period of A. temporary competitive advantage. B. competitive disadvantage. C. competitive parity. D. sustained competitive advantage

D

If Lucy Sullivan was a Sematech manager who oversaw the finance operations in the company's functional structure, Lucy would be considered a A. chief executive officer. B. divisional manager. C. chief operating officer. D. functional manager.

D

If Sematech were to continue seeking methods to maintain the company's cost leadership position that would be costly to duplicate, which of the following is most likely to be a basis of cost leadership that may be costly to duplicate? A. Establishing economies of scale B. Exploiting learning-curve economies C. Purchasing new technological hardware D. Securing differential access to low-cost productive inputs

D

If Sematech's efforts to increase its production capacity resulted in increased complexity and an inability of managers to control and operate the firm efficiently this would be an example of A. physical limits to efficient size. B. worker de-motivation. C. distance to markets and suppliers. D. managerial diseconomies.

D

If the potential responses of competing firms are likely to be very detrimental to the costs advantages of a cost leaders, firms pursuing a cost-leadership competitive strategy should A. drop their prices below competitors' prices to increase overall economic performance through increased volumes of profitable sales. B. raise their prices above competitors, increasing overall economic performance through higher margins. C. focus on a specific niche market to avoid direct competition with aggressive competitors. D. set their prices equal to competitors' prices, sacrificing some market share for increased profit margins and the release of less information.

D

In a declining industry A. product differentiation efforts are focused on product refinement as a basis of product differentiation. B. firms that are first movers can gain product differentiation advantages based on perceived technological leadership. C. highly differentiated firms may be able to gain product differentiation advantages by preempting strategically valuable assets. D. highly differentiated firms may be able to discover a viable market niche that will enable them to survive despite the overall decline in the market

D

In general, firms selling differentiated products face a demand curve that is A. upward sloping. B. horizontal. C. vertical. D. downward sloping

D

LaserTech's new technology appears to be A. valuable and rare but not costly to imitate. B. valuable and either rare or costly to imitate. C. valuable but neither rare nor costly to imitate. D. valuable, rare and costly to imitate

D

Most of the 3,100 maquiladoras operating in Mexico in 1999 were A. Mexican firms. B. Japanese firms. C. European firms. D. U.S. firms.

D

Product features, by themselves, are A. usually not a source of temporary competitive advantage, but they can be a source of a sustainable competitive advantage. B. usually not a source of either a temporary competitive advantage, or a source of a sustainable competitive advantage. C. usually can be a source of both a temporary competitive advantage and a source of a sustainable competitive advantage. D. usually not a source of sustained competitive advantage, but they can be a source of a temporary competitive advantage.

D

Resources that generate a temporary competitive advantage are A. valuable, rare and costly to imitate. B. valuable but neither rare nor costly to imitate. C. valuable and either rare or costly to imitate. D. valuable and rare but not costly to imitate

D

The ___________ strategy exploits all of the advantages of both international integration and local responsiveness. A. global B. multi-domestic C. international D. transnational

D

The link between volume of production and the cost of building manufacturing operations is particularly important in industries characterized by A. process innovations. B. product manufacturing. C. product innovation. D. process manufacturing

D

Through which bases of competitive advantage do firms attempt to alter the perceptions of current and potential customers, whether or not specific attributes of a firm's products or services are altered? A. Reputation B. Location C. Product customization D. Consumer marketing

D