MHR 423

Norce Autos allows its customers, suppliers, researchers and the community in general to contribute their ideas toward new product developments. Customers and other interested stakeholders can let the company know what new features they want to see in their next car. If the company faces any technical complexities that its internal R&D team cannot solve, it posts the problem on its website and allows people from the external community to provide solutions. In this scenario, Norce is primarily leveraging its: - Open innovation model -Economies of scope -Learning Curve Effects -Experience Curve effects

- Open innovation model

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

- define how a customer need will be met.

Which of the following is a disadvantage of equity alliances? -They do not permit the exchange of explicit knowledge. -They can bring about a lack of commitment. -Stock prices will go down for the parties involved. -They can entail significant investments. -They are reflective of weaker ties between firms.

-They can entail significant investments.

Free Winds, Inc. is a company that manufactures a variety of generators that run on wind power. The company wants to ensure that wind technology replaces all forms of exhaustible energy sources in the near future. Which of the following statements will make an accurate vision for Free Winds? -The company aims to make working fun and pleasurable for its employees. -We provide energy-efficient sources and services by investing in research and innovation. -All nations around the globe should have access to a sustainable energy source. -We make products that run on wind energy.

All nations around the globe should have access to a sustainable energy source.

_________ are best described as unique strengths, embedded deep within a firm, that allow a firm to differentiate its products and services from those of rivals, creating higher value for the customer or offering products and services of comparable value at a lower cost. -Resource leverages -Capital Gains -Core Competencies -Equity Reserves

Core competencies

The entrance of new firms into an industry that increases competition will most likely cause the overall Return on Equity of the industry to: -Decline -Increase then Decline -Increase

Decline

A first mover advantage is valuable under all conditions except ________ -a firm achieves an absolute cost advantage in terms of scale or scope -the scale of a firm's first move makes imitation unlikely -First time customers mover freely among competing products because of new product preferences -a firm's image and reputation advantages are hard to imitate at a later date

First time customers mover freely among competing products because of new product preferences

The share price of Groupon, a daily-deal website, fell by 90% just a year after its successful IPO. The firm was not able to sustain its competitive advantage because of the emergence of other daily-deal sites that were able to better serve the needs of local markets and specific population groups. Which of the following is the most accurate inference from this example? -Groupon's competency was not hard to imitate -Groupon invested in resources that were invaluable and common. - Groupon operated in an industry where the barriers to entry were high.

Groupon's competency was not hard to imitate

The inclusion of a Devil's Advocate as part of a company's leadership during strategic decision making team can assist in reducing the impact of the: -Anchor Effect -Lemming Effect -Endowment Effect -Sunk Cost

Lemming Effect

According to the value chain analysis, which of the following is a primary activity? - Human Resources -Accounting and finance -Marketing and Sales

Marketing and sales

Next Door is an instant messaging application for smartphones. New smartphone users find it easier to connect with friends and relatives through this mobile app when compared to other similar instant messaging applications. Hence, it has the largest user base in the industry. Thus, Next Door app's value has increased primarily due to its -Learning Curve Effects -Economies of Scale -Network effects -Economies of Scope

Network effects

During periods of high industry growth: -new product releases with minor modifications become common -firms indulge in intense promotional campaigns -rivals are focused on taking market share away from one another -Price competition among firms frequently decreases.

Price competition among firms frequently decreases.

Which of the following scenarios best illustrates horizontal integration? -Regal acquires a component parts manufacturer who previously supplied to Regal's competitors. -Regal sets up its own distribution channel and retail stores. -Regal joins with Marcus Motors, one of its direct competitors. -Regal enters into a licensing contract with a distributor in a new international market.

Regal joins with Marcus Motors, one of its direct competitors.

Smooth Fusion is a software company, which has built and acquired numerous assets over the years. According to the resource-based view of a firm, which of the following assets of Smooth Fusion will best enable it to gain and sustain a competitive advantage? -The headquarters owned by the company -the resources of the company that are mobile -the capital raised by the company from its shareholders -The expertise acquired by the employees in the company.

The expertise acquired by the employees in the company.

Which of the following statements is NOT true about the five forces of Porter's competitive analysis model? -The relative strengths of the five forces that shape competition are context-dependent. -An analysis of the five forces provides the basis for how a firm should position itself to gain and sustain competitive advantage. -The stronger the five forces in an industry, the greater the industry's profit potential. -Competition in the model is described as the tug-of-war between fives to capture as much as possible of the economic value created in an industry.

The stronger the five forces in an industry, the greater the industry's profit potential.

Which of the following scenarios illustrates a firm has a sustainable competitive advantage? -Peak LLC was able to outperform its competitors with its new production system, in terms of revenue , for a period of 4 months. -Jamison Inc generated revenue of $300,000 in the current year which is close to industry average of $320,000. - Zhang Corporation was able to hold its market share of 68% in the social networking industry for more than three years. -CR INC almost doubled its sales to 9000 units this ear compared to its previous year's sales of 5000 units, though the industry average is 10000 units

Zhang Corporation was able to hold its market share of 68% in the social networking industry for more than three years.

The Chief Executive Officer (CEO) of Yahoo, Marissa Mayer, established a mission by building on her vision. Considering this, how did Mayer implement the mission of Yahoo? - by convincing employees to work with a purpose -by making the mobile Internet an efficient tool for researchers -by convincing employees to make the product more accessible -by making the user experience of the mobile Internet easy and fun

by making the user experience of the mobile Internet easy and fun

The Scoop, Ltd. is a magazine publishing company whose average return on invested capital is approximately 5 percent. Because magazine publishing is a declining industry, the industry average has been negative (-5 percent) for the last few years. In this scenario, The Scoop Ltd. has a: -Competitive Disadvantage -All of the above - Competitive Advantage - Balanced Scorecard

competitive advantage

According to the Level-5 leadership pyramid, a manager in Level 1 typically: -makes productive contributions through motivation, talent, knowledge, and skills. -presents compelling vision and mission to guide groups toward superior performance. -builds enduring greatness into the organizations he or she leads -works effectively with others to achieve synergies and team objectives.

makes productive contributions through motivation, talent, knowledge, and skills.

The resource-based view of a firm assumes that the -resource bundles of firms competing in the same industry tend to be highly mobile, moving easily from firm to firm. -resource bundles of firms competing in the same industry are unique to some extent and thus differ from one another -resources of firms are highly exhaustible and hence they can't contribute to their competitive advantage -resources of firms are highly scarce and hence the government interferes to ensure equal distribution

resource bundles of firms competing in the same industry are unique to some extent and thus differ from one another

Synergies can come from all of the following except ______________. -Varied Business Missions -Shared Tangible Resources -Pooled Negotiating Power -Vertical integration

-Varied Business Missions

How is an equity alliance different from a joint venture? - An equity alliance involves taking ownership in a partner; a joint venture involves two or more people owning a firm. - An equity alliance involves partners contributing equity to a joint venture; a joint venture involves two or more people owning a firm. -An equity alliance involves taking ownership in a partner; a joint venture involves taking ownership by buying stock. -An equity alliance involves ownership that facilitates transaction-specific ventures; a joint venture involves taking ownership by buying stock

- An equity alliance involves taking ownership in a partner; a joint venture involves two or more people owning a firm.

Which of the following is an implication of high exit barriers in an industry? -the industry will be more attractive for new entrants -the competitive pressure among existing firms will be low. - The industry will face Excess capacity -The number of underperforming firms in the industry will be low.

- The industry will face Excess capacity

Which of the following statements is true of accounting data? -Accounting data are historical data and thus backward-looking -Accounting data consider off-balance sheet items, such as pension obligations of a firm. -Accounting data do not have to be adjusted in any manner to compare companies with different capital structures.

-Accounting data are historical data and thus backward-looking

In 2008, Blackberry's market capitalization (market value of its stock) reached $75Billion. By 2015, this valuation fell by more than 90 percent to less $7 Billion. Blackberry fell victim to two important PESTEL factors in its external environment: sociocultural and technological. How did the technology contribute to the Blackberry's decline? - Blackberry failed to adapt to a groundswell that involved workers bringing mobile devices to work. -Blackberry failed to change is device into one that could perform multiple tasks effectively. -Blackberry's system was not secure to hacking compared to new technologies. -Blackberry failed to produce an efficient emailing system using a keyboard.

-Blackberry failed to change is device into one that could perform multiple tasks effectively

A ______________ primarily details the goal directed actions managers take in their quest for competitive advantage in a single product market. - Mission Statement -Functional Level Strategy -Business Level Strategy

-Business Level Strategy

Which of the following is a feature of a monopolistically competitive industry? - a Single firm -High Entry Barriers -No pricing power -Differentiated products or services

-Differentiated products or services

Organic Eats is a restaurant that caters to the needs of a small percentage of highly health-conscious consumers. It has an all-organic, vegan menu. Since there are very few restaurants that offer the same unique service, customers are willing to pay a premium price for its products and services. In this scenario, Organic Eats is following a: -Broad Differentiation Strategy -Focused Differentiation Strategy -Liquidation Strategy -Product Diversification Strategy

-Focused Differentiation Strategy

Which of the following is an ineffective practice in alliance management? -Developing relational capabilities to manage mergers and acquisitions. -Establishing knowledge-sharing routines between alliance partners. -Coordinating a firm's portfolio of alliances. -Focusing on developing an alliance-management capability in isolation.

-Focusing on developing an alliance-management capability in isolation.

Divina Pharma an MF Electronics have together invested and created a new organization, First Health Inc., to focus on developing diagnostic devices. Through this new firm, both companies are attempting to combine their core competencies to innovate and reduce their risks associated with transaction-specific investments. However, the new organization operates independent of Divina and MF. Which of the following alternatives to integration does this scenario best illustrate? -A licensing contract -Franchisee -Joint Venture -Corporate Acquisition

-Joint Venture

The __________ allows the scanning, monitoring, and evaluating of changes and trends in a firm's macro environment. -VRIO -BCG Matrix -PESTEL framework -SWOT Analysis

-PESTEL framework

The managers at Movo Auto want to diversify their business by acquiring a consumer electronics company. This acquisition would mean increased job security, higher compensation, and greater decision-making authority for the managers. The managers correlate this acquisition to greater power for them rather than to to the appreciation in shareholder value. In this scenario, this acquisition by Movo is most likely a result of: -Principle-Agent problems -Experience Curve Effects -Resource ambiguity -time compression diseconomies

-Principle-Agent problems

Amazon has decided to enter the college bookstore market. The goal of Amazon Campus is to offer co-branded university-specific web sites that offer textbooks and paraphernalia, such as logo sweaters and baseball hats. The development shows Amazon's relentless pursuit of _________. -Horizontal Integration -Geographic Diversification -Vertical Integration -Product Diversification

-Product Diversification

Revenue Enhancement synergy may result from a variety of tactics, including _______________. -Dispersing products into individual markets. -Sharing Complementary knowledge to encourage new product innovation -Specializing distribution channels. -Selling products singularly to capitalize on learning curve effects.

-Sharing Complementary knowledge to encourage new product innovation

When fashion magazines face competition from fashion blogs on the web, which of the following five forces in the Five Force model primarily gets stronger? -The availability of complements -The bargaining power of buyers -The Threat of Substitutes -The bargaining power of suppliers

-The Threat of Substitutes

Which of the following is most likely an implication of new firms entering an industry? -The bargaining power of of buyers will reduce. -The rivalry among existing competitors will reduce. -The incumbent firms will spend more to satisfy existing customers. -The industry's overall profit potential and sales will increase.

-The incumbent firms will spend more to satisfy existing customers.

Which of the following is a result of horizontal integration in terms of Porter's Five Forces Model? -The industry structure becomes less profitable. -The industry structure becomes less consolidated. -There is a reduction of excess capacity in the market. -There is an increase in rivalry among existing firms

-There is a reduction of excess capacity in the market.

Which of the following statements accurately brings out the difference between economies of scale and learning effects? -Economies of scale occur over time, learning effects occur one point at a time. -Economies of scale reduce cost per unit, learning effect increases cost per unit. -While there are no diseconomies to learning, there are diseconomies to scale.

-While there are no diseconomies to learning, there are diseconomies to scale.

A differentiator is least likely to be threatened by increases in input prices due to powerful supplies when the: -differentiator is able to create significant difference between perceived value and current market prices. -source of a competitor's differential appeal is tangible rather than intangible. -differentiator is able to significantly reduce the value gap.

-differentiator is able to create significant difference between perceived value and current market prices.

The primary goal of a firm pursuing a blue ocean strategy should be to -achieve a less steeper learning curve -build a reputation of being the lowest-cost producer in its chosen industry -offer a differentiated product or service at a low cost

-offer a differentiated product or service at a low cost

The most efficient way to overcome the principal-agent problem in a firm is to: -provide stock options to managers -organize economic activities within the firm -downsize the existing workforce -increase the level of vertical integration within the firm

-provide stock options to managers

Diversification into upstream or downstream industries is called ____________. -synergistic integration -horizontal integration -related diversification -vertical integration

-vertical integration

The working capital of a small home-based business is $200,000. The revenues generated account to $600,000, and the profits incurred are $300,000. What would be the company's working capital turnover? -300% -200% -400% -$100,000

300%

Apple Watch retailed for $349 in 2015, and the firm was predicted to sell millions of units. The firm's total cost in terms of materials and labor for the Apple Watch was no more than $84. Thus, Apple's profit for each watch sold is an estimated $265, with a profit margin of ________ percent. -365 -215 -315 -265

315

Which of the following statements is true of corporate strategy? -Deciding whether to adopt a differentiation or a cost-leadership strategy is part of formulating the corporate strategy. -The objective of corporate-level strategy is to ensure that the sum of the values of individual business units is greater than the overall corporate value. - Formulating a corporate strategy involves general managers answering questions relating to how to compete in order to achieve superior performance. -A corporate strategy must be able to create synergies across business units that are quite different.

A corporate strategy must be able to create synergies across business units that are quite different.