Strategic Management

The following questions apply to Apple, Tesla, Gap, and Ashley Furniture Does the firm implement related or unrelated diversification? Explain your answer

All firms implemented a related diversification strategy

1. Which of the following statements is accurate? a. Firms with a low-cost position can reduce the threat of rivalry in an industry. b. A cost leadership business level strategy reduces the threat of new entrants by increasing cost-based barriers to entry. c. Cost leaders are more vulnerable to technological changes that make production methods obsolete. d. All of the above are accurate.

All of the above are accurate.

1. The following questions apply to Apple, Tesla, Gap, and Ashley Furniture a. What type of corporate strategy [i.e., diversification strategy (ies)] does the firm have?

Apple - Backward and forward vertical integration and horizontal integration Gap - Horizontal integration Tesla - Forward Vertical integration Ashley Furniture - Forward Vertical integration

1. The following questions apply to Apple, Tesla, Gap, and Ashley Furniture a. What is (are) the firm's business strategy (ies)?

Ashley Furniture - Cost leadership All other firms - Product differentiation

1. ESPN's development of an extensive offering of X-Games coverage that is unmatched by any other sports outlet is an example of which element of the VRIO framework? a. Rare b. Valuable c. Inimitable d. Organization

a

1. The set of business activities in which a firm engages to develop, produce, and market its products or services is known as its a. value chain b. Capabilities c. research and development d. organizational infrastructure

a

1. To the extent that a firm's resources and capabilities enhance its competitive position by enabling a firm to exploit its opportunities or neutralize its threats, these resources and capabilities are valuable and are known as a. strengths. b. core competencies. c. temporary competitive advantages. d. sustainable competitive advantages.

a

1. Under which of the following circumstances is vertical integration hazardous? a. When the technology involved in different stages of production is changing rapidly b. When vertical integration involves moving downstream into retailing c. When the value added by successive stages of production is declining d. When the industries involved are undergoing rapid expansion

a

1. Which of the following is most likely to be a rare source of cost advantage? a. Technological software b. Technological hardware c. Cost advantages based on economies of scale d. If the efficient size of a firm or manufacturing facility is significantly smaller than the total size of the industry.

a

1. Which of the following statements is not generally true of a diversification strategy based on the realization of economies of scope? a. The head office evaluates each business unit as a stand-alone operation. b. The strategy allows a company to realize cost economies from sharing manufacturing facilities, distribution channels, advertising campaigns, and research and development costs among business units. c. The strategy may allow a company to use shared resources more intensively, thereby realizing economies of scale. d. Managers must be aware of the costs of coordination.

a

1. Which primary activity in the value chain is performed last as inputs are transformed into outputs? a. Service and support b. Marketing and sales c. Materials management d. Human resources

a

1. in 1999, Glaxo Welcome and SmithKline Beecham came together to create a single firm known as GlaxoSmithKline. This is an example of a(n) a. acquisition. b. credible commitment. c. partnership. d. strategic alliance.

a

1. The resource based view assumption that some of the resource and capability differences among firms may be long lasting is known as a. resource mobility. b. resource immobility. c. resource homogeneity. d. resource heterogeneity.

b

1. When technological changes are low and customer needs are standardized, the most appropriate generic business strategy to pursue is a. focus. b. cost leadership. c. market segmentation. d. product differentiation.

b

1. With regard to the threat of suppliers, a product differentiation business strategy a. increases the threat of suppliers because a firm with a highly differentiated product is unable to pass increased costs on to customers. b. decreases the threat of suppliers because a firm with a highly differentiated product can pass increased costs on to customers. c. has no effect on the threat of suppliers. d. decreases the threat of suppliers because a firm with a highly differentiated product has stronger bargaining power over suppliers.

b

1. Another name for long-term cooperative relationships between two or more companies who agree to commit resources to develop new products is a. horizontal integration. b. outsourcing. c. strategic alliance. d. vertical integration.

c

1. Firms pursuing a cost leadership business strategy are typically characterized by a. infrequent cost control reports. b. a de-emphasis on quantitative cost goals and costs. c. close supervision of labor, raw materials, and inventory. pursuit of the lowest cost investments in the value chain

c

1. 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. Product complexity. b. Product features. c. Product customization. d. Linkages between functions.

c

1. strategy of vertical integration may be a risky strategy for a company to pursue when demand is a. predictable. b. stable. c. unpredictable. d. steadily increasing.

c

1. A firm's marketing skills and teamwork as well as its cooperation among managers are examples of a. capabilities. b. human resources. c. organizational leadership. d. organizational infrastructure.

d

1. Compared to a differentiator, the cost leader has the advantage over its rivals of a. making higher profit margins. b. enjoying higher brand loyalty. c. having inimitable production methods. d. being better able to withstand the negative influence of powerful suppliers and buyers.

d

1. In which of the following is a firm most likely to lose direct control over value creation activities? a. Acquisition b. Vertical integration c. Strategic alliance d. Outsourcing

d

1. Which of the following is (are) the probable consequence(s) of an inability to integrate two divergent corporate cultures after an acquisition? a. High management turnover b. Damaging political tensions between the management of the acquired and acquiring companies c. An inability to realize potential gains from synergies d. All of these

d

1. Which of the following reasons can make a diversification strategy an unwise course of action for a company to pursue? a. Changing industry conditions b. Diversification for the wrong reasons c. Increasing bureaucratic costs of diversification d. All of these

d

1. Which primary activity in the value chain is concerned with the design of products or services and production processes? a. Production b. Marketing and sales c. Materials management d. Research and development

d

1. Yankee Candle Company offers customers candles that burn for 50-60 hours, much longer than most other candle brands. Therefore, customers are willing to pay a higher price for these candles. Based on this information, the firm is most likely utilizing which business strategy? a. focus. b. cost leadership. c. market segmentation. d product differentiation

d

1. Firms that possess and exploit costly-to-imitate, rare, and valuable resources in choosing to implement their strategies may enjoy a period of a. competitive parity. b. competitive advantage. c. temporary competitive advantage. d. sustainable competitive advantage.

sustainable competitive advantage.