Strat MGMT Mid-Term

A competitive advantage based on inimitability can be sustained for at least some time if it has the following characteristics: A. physical uniqueness, path dependency, causal ambiguity, and social complexity B. psychographic uniqueness, path dependency, causal ambiguity, and substitutability C. rarity, path dependency, causal ambiguity, and social substitutability D. geographic uniqueness, cause dependency, social ambiguity, and path complexity

A

A large fabricator of building components purchased a steel company to provide raw materials for its production process. This is an example of A. backward integration. B. economies of scale. C. forward integration. D. product differentiation.

A

A major reason outsourcing is being used is that: A. it allows top managers to focus on operational details. B. few firms possess superior capability in all primary and support activities. C. it permits unlimited access to capital resources. D. competitors do not have access to the same external sources.

A

A marketing department that promises delivery faster than the production department's ability to produce is an example of a lack of understanding of the A. interrelationships among functional areas and firm strategies. B. need to maintain the reputation of the company. C. organizational culture and leadership. D. synergy of the business units.

A

A variety of firm resources include interpersonal relations among managers in the firm, its culture, and its reputation with its suppliers and customers. Such competitive advantages are based upon A. social complexity. B. path dependency. C. physical uniqueness. D. tangible resources.

A

Advertising is a ______ activity. Supply of replacement parts is a _________ activity. A. primary; primary B. support; primary C. support; secondary D. primary; support

A

Backward integration occurs when: A. a company produces its own inputs. B. a company owns its own source of distribution of outputs. C. a company is concentrated in a single industry. D. there are no linkages among the businesses.

A

Examples of _____________ include: "to be the happiest place on earth" (Disney), and "restoring patients to full life" (Medtronics). A. vision statements B. mission statements C. strategic objectives D. operational objectives

A

Southwest Airlines generic competitive strategy can be best characterized by: A. Cost Leadership. B. Differentiation. C. Focused Cost Leadership. D. Focused Differentiation. E. Unrelated Diversification.

A

Southwest Airlines generic comprehensive strategy can be best characterized by A. Cost leadership B. Differentiation C. Focused Cost Leadership D. Focused Differentiation E. Unrelated Diversification

A

The best measure of a company's ability to meet imminent financial obligations is known as the A. current ratio. B. total asset turnover. C. debt ratio. D. profit margin.

A

The four key attributes of strategic management include the idea that A. strategy must be directed toward overall organizational goals and objectives. B. strategy must be focused on long-term objectives. C. strategy must be focused on one specific area of an organization. D. strategy must focus on competitor strengths.

A

The most intense rivalry results from: A. numerous equally balanced competitors, slow industry growth, high fixed or storage costs. B. few competitors, slow industry growth, lack of differentiation, high fixed or storage costs. C. numerous equally balanced competitors, manufacturing capacity increases only in large increments, low exit barriers. D. a high level of differentiation.

A

The threat of new entrants is high when there are A. low economies of scale. B. high capital requirements. C. high switching costs. D. high differentiation among competitors' products and services.

A

Value chain activities are most heavily dictated by central office (worldwide headquarters) under which of the following strategies? A. global B. multi-domestic C. differentiation D. international

A

Which of the following would be an entry barrier? A. large economies of scale B. low switching costs C. easy access to raw materials D. low capital requirements

A

Which of the following would be an entry barrier? A. large economies of scale B. low switching costs C. easy access to raw materials D. low capital requirements

A

A crash R&D program by one firm cannot replicate a successful technology developed by another firm when research findings cumulate. This is an example of A. social complexity. B. path dependency. C. physical uniqueness. D. causal ambiguity.

B

A supplier group would be most powerful when there is/are A. many suppliers. B. few substitute products. C. low differentiation of products supplied. D. high threat of backward integration by the buyers.

B

According to value chain analysis, which of the following would be considered part of a firm's infrastructure? A. human resource management B. information systems C. technology development D. procurement

B

Effective vision statement include A. all strategic directions of the organization. B. a brief statement of the company's direction. C. strategic posturing and future objectives. D. financial objectives and projected figures.

B

Emerging sociocultural changes in the environment include A. changes in the ethnic composition. B. the increasing educational attainment of women in the past decade. C. progressively less disposable income by consumers. D. changes in the geographic distribution of the population.

B

For a resource to provide a firm with the potential for a sustainable competitive advantage, it must have four attributes. Which of the following is not one of these attributes? A. rare B. easy for competitors to substitute C. valuable D. difficult for competitors to imitate

B

Fortune Brands states they will "cut corporate costs by $30 million a year." This is an example of a A. nonfinancial strategic objective. B. financial strategic objective. C. vision statement. D. mission statement.

B

In assessing its primary activities, an airline would examine A. employee training programs. B. baggage handling. C. criteria for lease versus purchase decisions. D. the effectiveness of its lobbying activities.

B

In contrast to an organization's vision, its mission should A. be shorter in length. B. encompass both the purpose of the company as well as the basis of competition. C. encompass all the major rules and regulations of the corporate work force. D. be less detailed.

B

Inbound logistics include A. machining and packaging. B. warehousing and inventory control. C. repair and parts supply. D. promotion and packaging.

B

Smithfield Foods produces hams and other meat products. It owns hog raising operations. This is an example of a _____ business. A. de-integrated B. vertically integrated C. totally integrated D. horizontally integrated

B

Southwest Airlines success is best described by: A. service differentiation: the clients enjoy the Southwest spirit. B. strategic consistency: strong fit between customer segment needs and internal activity system. C. aggressive reaction: threaten new entrants with extreme rivalry activity. D. price maximization strategy: system skims maximum price for each customer segment.

B

Strategic groups consist of A. top executives who make strategies for a company. B. firms within an industry that follow similar strategies. C. executives drawn from different companies within an industry that makes decisions on industry standards. D. firms within an industry that decide to collude rather than compete with each other so that they can increase their profits.

B

Suppliers are more powerful when: A. volume of purchase is low. B. threat of backward integration by buyers is low. C. cost savings from the supplier's product are minimal. D. the buyer's profit margin is low.

B

The aging of the population, changes in ethnic composition, and effects of the baby boom are: A. macroeconomic changes B. demographic changes C. global changes D. sociocultural changes

B

The general and competitive environments A. are independent and dynamic over time. B. tend to be interrelated and dynamic over time. C. have similar impact on organizations of different industries. D. are independent and static over time.

B

Upper limits on the prices a firm can charge are impacted by: A. expected retaliation from competitors B. the cost of substitute products C. variable costs of production D. customers' high switching costs

B

Wellpoint Health Networks states: "Wellpoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future." This is an example of a... A. strategic objective. B. vision statement. C. vague statement of direction. D. line manager's individual goal.

B

Which of the following statements about strategic groups is FALSE? A. Two assumptions are made: (1) no two firms are totally different; (2) no two firms are exactly the same. B. Strategic groupings are of little help to a firm in assessing mobility barriers that protect a group from attacks by other groups. C. Strategic groups help chart the future directions of firms' strategies. D. Strategic groups are helpful in thinking through the implications of each industry trend for the group as a whole.

B

Which of the following would be considered part of a firm's general environment? A. decreased entry barriers B. increased trade deficit C. increased bargaining power of the firm's suppliers D. increased competitive intensity

B

A divisional structure: A. is organized around functional area departments. B. typically improves the performance of firms pursuing a strategy of vertical integration. C. is usually more responsive to customer needs and competitors' actions. D. provides efficiencies in the management of organizational resources.

C

A resource is valuable and rare but neither difficult to imitate nor without substitutes. This should enable the firm to attain A. no competitive advantage B. competitive parity C. a temporary competitive advantage D. a sustainable competitive advantage

C

According to the text, the "triple bottom line" approach to corporate accounting includes which three components: A. financial, environmental, and customer B. financial, organizational, and customer. C. financial, environmental, and social. D. financial, organizational, and psychological.

C

An independent group of suppliers, such as farmers, gathers to form a cooperative to sell their products to buyers directly, replacing their former distributor. This is an example of A. threat of entry. B. backward integration. C. forward integration. D. threat of substitute products.

C

As our world increases in complexity, the global environment is increasingly competitive and challenging. The key to effective globalization is A. managing the flow of goods. B. more people speaking more languages. C. managing the flow of capital, people, and information. D. governmental regulations.

C

Assessment of a firm's primary activities should include analysis of all of the following except: A. inbound logistics B. operations C. human resources D. marketing and sales

C

Buyers are more powerful when: A. there is not a threat of backward integration. B. they are not a significant purchaser of the supplier's output. C. there are no switching costs. D. the buyers' industry is fragmented.

C

Customer service would include A. product promotion. B. product distribution. C. parts supply. D. procurement of critical supplies.

C

For a resource to provide a firm with the potential for a sustainable competitive advantage, it must have the following four attributes: A. rare, valuable, mobile, nonsubstitutable B. rare, inimitable, physically unique, nonsubstitutable C. rare, valuable, inimitable, nonsubstitutable D. rare, valuable, physically unique, causally ambiguous

C

Gillette combines several technologies (e.g., metallurgy, physiology, physics) to attain unparalleled success in the wet shaving industry. This is an example of their A. tangible resources. B. intangible resources. C. organizational capabilities. D. strong primary activities.

C

Human resource management consists of activities involved in the recruiting, hiring, training, development, and compensation of all types of personnel. It... A. supports only individual primary activities. B. supports only individual support activities. C. supports both individual primary and support activities and the entire value chain. D. supports mostly support activities but does have some impact on primary activities.

C

Increasingly larger numbers of women entering the work force since the early 1970s is an example of A. demographic changes. B. political and legal environmental changes. C. sociocultural changes. D. technological developments.

C

The differentiation strategy can be effective in controlling the power of rivalry in an industry because: A. customers will seek out the lowest cost product. B. customers have no loyalty. C. customers are loyal to brands that are differentiated in meaningful ways. D. the differentiation strategy benefits from rivalry. E. all of these.

C

The following are examples of socially complex organizational phenomena except: A. a firm's culture B. interpersonal relations among a firm's managers C. complex physical technology D. reputation with suppliers and customers

C

The hierarchy of organizational goals is in this order (least specific to most specific): A. vision statements, strategic objectives, mission statements B. mission statements, strategic objectives, vision statements C. vision statements, mission statements, strategic objectives D. mission statements, vision statements, strategic objectives

C

The political/legal segment: When the US congress passed the Sarbanes-Oxley Act in 2002, A. Canada deregulated the associations. B. no similar Canadian legislation was developed. C. Canada followed with similar provisions. D. the provincial governments developed similar laws.

C

The resource-based view (RBV) of the firm combines two perspectives: A. the primary and support activities of the firm B. the interrelationships among the primary activities of the firm and corporate management C. the internal analysis of the firm as well as the external analysis of the industry and competitive environment D. the industry and the competitive environment

C

The threat of new entrants is increased if: A. access to distribution channels is hard to gain. B. economies of scale in the industry are high. C. product differentiation in the industry is low. D. capital requirements in the industry are high.

C

The three key types of resources that are central to the resource-based view of the firm are: A. tangible resources, intangible resources, and organizational structure. B. culture, tangible resources, intangible resources. C. tangible resources, intangible resources, and organizational capabilities. D. tangible resources, intangible resources, and top management.

C

The three key types of resources that are central to the resource-based view of the firm are: A. tangible resources, intangible resources, and organizational structure B. culture, tangible resources, intangible resources C. tangible resources, intangible resources, and organizational capabilities D. tangible resources, intangible resources, and top management

C

Threat of substitute products comes from A. other companies in the same industry. B. foreign companies which can use cheap labour in their countries. C. firms in other industries that produce products or services that satisfy the same customer need. D. all of the answers are correct

C

Which is considered a force in the "Five Forces model"? A. increased deregulation in an industry B. the threat of government intervention C. rivalry among competing firms D. recent technological innovation

C

Which of the following firms would likely pose the LEAST competitive threat? A. a firm in the same industry and in the same strategic group B. a firm that produces substitute goods to your product line C. a competitor to your product where a high switching cost exists D. a firm in the same industry and in the nearest strategic group looking to join your group

C

Which of the following is a support activity? A. inbound logistics B. operations C. technology development D. customer service

C

Which of the following lists consist of support activities? A. human resource management, technology development, customer service, and procurement B. human resource management, customer service, marketing and sales, and operations C. human resource management, information systems, procurement, and firm infrastructure D. customer service, information systems, technology development, and procurement

C

___________ are associated with collecting, storing, and distributing the product or service to buyers. They consist of warehousing, material handling, delivery operation, order processing, and scheduling. A. Services B. Inbound logistics C. Outbound logistics D. Operations

C

Buyer power will be greater when A. the products purchased are highly differentiated. B. there are high switching costs. C. the industry's product is very important to the quality of the buyer's end products or services. D. it is concentrated on purchasing large volumes relative to seller sales.

D

Capabilities are non-substitutable when: A. there are no direct substitutes in the five forces model. B. the firm's products cannot be a substitute for others' products. C. the switching costs in the industry are very high. D. there is no alternative means to achieve the same results.

D

Exit barriers arise from A. specialized assets with no alternative use. B. governmental and social pressures. C. strategic interrelationships with other business units within the same company. D. all of the answers are correct

D

In Porter's Five Forces model, conditions under which a supplier group can be powerful include all the following except A. lack of importance of the buyer to the supplier group. B. high differentiation by the supplier. C. dominance by a few suppliers. D. readily available substitute products.

D

Individual investors are dependent upon the corporation's managers to: A. diversify the stockholder's investments in order to reduce risk. B. add value to their investments in a way that the stockholders could not accomplish on their own. C. achieve risk reduction at a lower cost than stockholders could obtain on their own. D. maximize short-term returns in the form of dividends.

D

The bargaining power of suppliers increases as A. more suppliers enter the market. B. importance of buyers to supplier group increases. C. switching costs for buyers decreases. D. the threat of forward integration by suppliers increases.

D

The bargaining power of suppliers is enhanced under the following market condition: A. no threat of forward integration B. low differentiation of the suppliers' products C. greater availability of substitute products D. dominance by a few suppliers

D

Vision statements are used to create a better understanding of the organization's overall purpose and direction. Vision statements A. are very specific. B. provide specific objectives. C. set organizational structure. D. evoke powerful and compelling mental images.

D

When selecting activities to outsource, firms should select activities that: A. create value. B. neutralize external threats. C. are critical to their success. D. are not core to their strategy.

D

______________ are the competencies or skills that a firm employs to transform inputs into outputs. A. Tangible resources B. Intangible resources C. Reputational resources D. Organizational capabilities

D

A firm's intangible resources refer to its capacity to deploy tangible resources over time and leverage those resources effectively.

FALSE

A successful differentiation strategy increases rivalry since buyers become more price-sensitive.

FALSE

A successful differentiation strategy lowers entry barriers because of customer loyalty and the firm's ability to provide uniqueness in its products and services.

FALSE

According to the text, a mission statement is an overarching statement that is massively inspiring, long-term, and only discusses the purpose of the company.

FALSE

Demographic, economic, political/legal, sociocultural, technological, and global are the six elements comprising the industry environment.

FALSE

Focus, by itself, often constitutes a competitive advantage.

FALSE

For a resource to provide a firm with potential sustainable advantages it must satisfy only two criteria: rareness and difficulty in substitution.

FALSE

If a firm has a successful differentiation strategy, it is not necessary to attain parity on cost.

FALSE

In value chain analysis, value is measured by market value of the total stock outstanding of the company.

FALSE

Michael Porter's Five Forces Analysis is a dynamic tool for analyzing industry attractiveness.

FALSE

Mission statements are not useful for startups or small organizations.

FALSE

Organizational goals and objectives should be vague in order to allow for changes in strategy.

FALSE

Path dependency has no impact on the inimitability of resources.

FALSE

Performing a value chain analysis provides a complete assessment of the firm's strengths and weaknesses.

FALSE

Porter's five forces model is designed to help us understand how social attitudes and cultural values impact U.S. businesses.

FALSE

Rivalry is most intense when there are high exit barriers and high industry growth.

FALSE

Supplier power tends to be highest in industries where products are vital to buyers, where switching from one supplier to another is very costly, and where there are many suppliers.

FALSE

The five forces model (buyers/suppliers/new entrants/substitutes/rivalry) is a firm-level analytical model

FALSE

The power of a buyer group is increased if the buyer group has less concentration than the supplier group.

FALSE

The strategic groups in the world-wide automobile industry have been very stable and unchanging in recent years.

FALSE

The use of the strategic groups concept is generally not helpful in charting the future directions of firms' strategies.

FALSE

A mission statement encompasses both the purpose of the company as well as the basis of competition and competitive advantage.

TRUE

A pitfall of a focus strategy is that focusers can become too focused to satisfy buyer needs.

TRUE

Although vision statements vary from organization to organization, vision statements are intended to motivate and inspire employees to work toward a general goal.

TRUE

Analytical tools such as value chain analysis and five forces analysis are useful tools to employ when conducting strategic analysis.

TRUE

Buyer power tends to be higher if suppliers provide undifferentiated or standard products.

TRUE

Capabilities that are causally ambiguous are difficult to imitate.

TRUE

Coors' position as the most profitable brewer (per barrel) in 1977, was based primarily on its differentiation and mystique.

TRUE

Creating a niche by differentiating one's product or service often allows small firms to compete successfully with market leaders.

TRUE

Establishing a customer service hotline to handle customer complaints would be considered a primary activity in value chain analysis.

TRUE

Globalization is the flow of capital, people, and information throughout the world.

TRUE

In some industries, high switching costs can act as an important barrier to entry.

TRUE

In value chain analysis, general management is considered part of a firm's infrastructure.

TRUE

Industries characterized by high economies of scale typically attract fewer new entrants.

TRUE

One pitfall of a differentiation strategy is that a brand's identification in the marketplace may become diluted through excessive product line extensions.

TRUE

Organizational vision statements are the beginning point for the hierarchy of goals throughout the organization. An organization's vision statement should be massively inspiring, overarching, and long-term.

TRUE

Porter's five forces model helps to determine both the nature of competition in an industry and the industry's profit potential.

TRUE

Primary activities contribute to the physical creation of a product or service, its sale and transfer to the buyer, and its service after the sale.

TRUE

Products and services that are difficult to imitate help firms sustain their profitability.

TRUE

Shareholders, employees, and the community-at-large are among a firm's stakeholders.

TRUE

Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages

TRUE

Tangible resources are assets that are relatively easy to identify such as financial and physical assets

TRUE

The more attractive the price/performance ratio of substitute products, the more tightly it constrains an industry's ability to charge high prices.

TRUE

The power of suppliers will be enhanced if they are able to maintain a credible threat of forward integration.

TRUE

The value chain concept assumes that both primary and support activities are capable of producing value for customers.

TRUE

Value chain analysis assumes that a firm's basic economic purpose is to create value and it is a useful framework for analyzing a firm's strengths and weaknesses.

TRUE

Given its 1977 strategy (beginning of the case), it would make sense for Coors beer business to have been organized as a:

functional organizational structure.