strategic management quizzes 1-4

Which of the following options is the sixth force added to the Porter's Five force model Competitors Collaborators Suppliers Complementors

Complementors

Which of the following is a likely implication of lowering of interest rates? Cost of capital for firms will increase Consumer demand for large-ticket items may increase Economic growth rate will fall Firms will invest less in future growth

Consumer demand for large-ticket items may increase

Which of the following options is a feature of an oligopolistic industry structure? Limited pricing power High entry barriers Large number of small sellers(firms) Standardized or undifferentiated products

High entry barriers

________ are best described as the ethical standards and norms that govern the behavior of individuals within a firm. -Job descriptions -Customs duties - Organizational core values - Corrective controls

Organizational core values

Jennifer, a manager at a multinational organization, is trying to carefully scan and link the firm's internal environment to its external environment. The insights from this analysis will allow her to effectively leverage the company's internal strengths to exploit external opportunities, while mitigating internal weaknesses and external threats. In this scenario, which of the following managerial tools is Jennifer employing? Blake Mouton managerial grid SWOT analysis Ansoff's matrix BCG analysis

SWOT analysis

which of the following statements accurately brings out the difference between tangible and intangible resources? Tangible assets are difficult for competitors to imitate, whereas intangible assets can be easily replicated. Tangible assets can be bought on the open market by anyone with the necessary cash, whereas intangible assets cannot be easily purchased. Tangible resources take a longer time to build, whereas intangible assets can be built comparatively easily. Tangible resources contribute to a company's competitive advantage, whereas intangible resources have little effect on competitive advantage.

Tangible assets can be bought on the open market by anyone with the necessary cash, whereas intangible assets cannot be easily purchased.

A strategic group is a set of companies that compete more directly with each other within an industry a set of suppliers that provide strategic inputs to the industry firms an association of companies that lobby with the government a group of companies that have strategic foresight to insure competitive advantage

a set of companies that compete more directly with each other within an industry

OpenUrToys Inc. is a consulting firm that opens your toys for you and then films your emotional response. They have many clients and are able to generate above average returns relative to their competitors. In this scenario, we would conclude that OpenUrToys Inc. probably has a a competitive disadvantage. sustainable competitive advantage. competitive advantage. a competitive parity.

competitive advantage.

Under the ________ framework, producer surplus is important in the quest for competitive advantage because this is the profit that a firm captures when producing and selling a good or service. PESTEL accounting profitability economic value creation shareholder value creation

economic value creation

Industrial Drills, a company that manufactures industrial tools, incurs higher costs because of its refusal to outsource its manufacturing to countries where labor costs are lower. This reflects Industrial Drills' ________ responsibility. -egal -demographic -ethical -economic

ethical

Organizational core values are the ________ that govern the behavior of individuals within a firm or organization. -political principles and policies -ethical standards and norms -economic measures -social beliefs and actions

ethical standards and norms

Urst Ammunition Inc., a firm controlled and managed by the government of Urst, is the only company that has the license to produce defense arms in the country. Which of the following industry competitive structures does this best illustrate? oligopoly monopoly monopolistic competition perfect competition

monopoly

Pharmacat Pharmaceuticals invested $3.4 billion dollars to develop a new drug for individuals with diabetes. After Pharmacat receives FDA approval of the drug, its marginal cost to produce the drug for market will be high. low. moderate. unpredictable.

low.

The _____ primarily allows the scanning, monitoring, and evaluating of changes and trends in a firm's macro environment. BCG matrix STEP (or PESTEL) framework SWOT analysis VRIO framework

STEP (or PESTEL) framework

While Sesmic Inc. operates in a monopolistically competitive industry, Energy 4 All Inc. operates in a monopoly. Keeping this information in mind, which of the following statements is most likely true? The number of buyers will be limited for both Sesmic and Energy 4 All. Sesmic will have more profit potential than Energy 4 All. Sesmic will have more pricing power than Energy 4 All does. The threat of new entrants will be higher for Sesmic than for Energy 4 All.

The threat of new entrants will be higher for Sesmic than for Energy 4 All.

Which of the following is a drawback of the SWOT analysis? A drawback of this framework is that it allows managers to evaluate only a firm's current situation and not its future prospects. The SWOT analysis takes into account only the internal environment of a firm, ignoring the equally important external environment. A problem with this framework is that a strength can also be a weakness, and that an opportunity can also simultaneously be a threat. This framework is only applicable to the manufacturing industries; it is ineffective when applied to the service firms.

A problem with this framework is that a strength can also be a weakness, and that an opportunity can also simultaneously be a threat.

Bill Lewis wants to become a business strategy consultant and doesn't understand how emerging consultants get started. Bill should familiarize himself with the ________ framework that outlines the important process when examining the concept of strategic management. -AFE: Analyze-Formulate-Execute -API: Analyze-Plan-Implement - AFI: Analyze-Formulate-Implement - APE: Analyze-Plan-Execute

AFI: Analyze-Formulate-Implement

Most consumers and investors today want the firms they do business with to look beyond just the profit motive. In fact, they want firms that behave legally and ethically while also giving back to their communities via philanthropic activities. The framework that attempts to reconcile these wants is known as -corporate social responsibility. -business model analysis. -value chain driven decision making. -stakeholder impact analysis.

CSR

Which of the following summarizes the difference between corporate strategy and business strategy? -Corporate strategy deals with how to compete; business strategy deals with when to compete. -Corporate strategy deals with where to compete; business strategy deals with how to compete. -Corporate strategy deals with when to compete; business strategy deals with how to compete. -Corporate strategy deals with how to compete; business strategy deals with where to compete.

Corporate strategy deals with where to compete; business strategy deals with how to compete.

How does causal ambiguity act as an isolating mechanism for organizations? It creates a situation in which different social and business systems interact with one another. It makes it difficult for competitors to deploy their resources by creating ambiguity within their organizational structures. It makes it difficult for competitors to imitate core competencies quickly due to time compression diseconomies. It makes it difficult for the competitors to understand why a company has been so successful.

It makes it difficult for the competitors to understand why a company has been so successful.

Which of the following options is a primary feature of the five forces model? It views competition within an industry broadly to include forces such as buyers, suppliers, and the threat of substitutes. It is concerned exclusively about the intensity of rivalry among direct competitors. It helps managers determine the changing speed of an industry or the rate of innovation. It takes into account a firm's internal resources, capabilities, and core competencies.

It views competition within an industry broadly to include forces such as buyers, suppliers, and the threat of substitutes.

Which of the following strategies best illustrates a generic business strategy? -a cost-cutting strategy that corporate executives in the headquarters want all business units of a large conglomerate to implement -a decision to computerize a firm's database in order to improve customer service -a strategy to use monetary incentives to motivate employees working on a project -a decision to niche market the jewelry sold by a company while the apparel division under the same company sells its products through mass marketing

a decision to niche market the jewelry sold by a company while the apparel division under the same company sells its products through mass marketing

All of the following are external stakeholders except which of the following? -customers -competitors -creditors -alliance partners

competitors

Dontechi is a file hosting service that allows users to store up to 5GB of data with no restrictions or charges. However, users have to pay a fee for advanced features on the cloud storage system and additional storage space. Which of the following business models does this best illustrate? pay-as-you-go freemium razor-razor-blade subscription-based

freemium

To implement specific business strategies, general managers of strategic business units rely on -functional managers. -corporate executives. -strategic leaders. -external stakeholders.

functional managers.

A positive relationship between vision statements and firm performance is more likely to exist when -internal stakeholders are isolated from defining and revising the visions. -visions are product-oriented. -vision statements are equivalent to listening to the customers. -organizational structures are aligned with the firm's vision statement.

organizational structures are aligned with the firm's vision statement.

When young start-up entrepreneurs make claims like, "We will be the Uber of X, where X is any other category than ride hailing" or "We will be the Airbnb of Y, where Y is any other category than hospitality services" they are best illustrating which of the following cognitive biases? -escalation of commitment -representativeness bias -groupthink -confirmation bias

representativeness bias

Dimitre Corp. has been able to gain and sustain a competitive advantage due to its strong relationship with its employees, customers, suppliers, and local communities. The company believes in lifetime employment and ensures that its employees grow along with the company. Investors are more than satisfied with the returns on their investments. Also, 3 percent of the company's profit is spent on community development. With initiatives like these, customers feel privileged to associate themselves with Dimitre products. This scenario best illustrates the implementation of a -wild card event. -stakeholder strategy. -black swan event. -strategic analysis.

stakeholder strategy.

In order to better achieve a competitive advantage, firms must now adopt a holistic approach towards satisfying multiple stakeholders opposed to focusing on the needs of their stockholders. This integrative approach is referred to as -stakeholder strategy. -internal shareholder strategy. -integration strategy. -exchange relationship strategy.

stakeholder strategy.

Due to economic regression in Jabu, the profitability of the large corporation Honey Comb Inc. was poor. An analysis of the company's business showed that the company could become profitable if it divested a few strategic business units under its banner. From which of the following businesses would Honey Comb Inc. find it most easy to exit? the pharmaceutical business, where the company has a large number of fixed costs the automobile industry, where the company has contractual obligations with suppliers the e-commerce retail business, where investments on assets are low the airline business, where the company's strategic commitments are long-term

the e-commerce retail business, where investments on assets are low

Which of the following is an external performance metric? return on revenue fixed assets turnover inventory turnover total return to shareholders

total return to shareholders

The interaction between a firm and its diverse internal and external stakeholders is best described as a(n) -exchange relationship. -ergonomic relationship. -fiduciary responsibility. -cartel arrangement.

exchange relationship.

First Pharma Inc. and GeoVax Inc. are two competing firms in the pharmaceutical industry. While First Pharma Inc.'s vision is "to be a preeminent drug manufacturer in the industry," GeoVax Inc.'s vision is "to make good health a reality for everyone around the world." Which of the following is an implication of these different visions? -First Pharma Inc.'s vision is more long-term and futuristic than GeoVax Inc.'s vision. -GeoVax Inc. will be more flexible than First Pharma Inc. when adapting to changing environments. -First Pharma Inc. is more likely to have a positive relationship between its vision and firm performance than GeoVax Inc. -GeoVax Inc.'s vision is more product-oriented than the vision of First Pharma Inc.

GeoVax Inc. will be more flexible than First Pharma Inc. when adapting to changing environments.

Which of the following is a disadvantage of the balanced-scorecard approach? It provides limited guidance about which metrics to choose. It provides limited guidance for designing and planning business processes. It fails to link the strategic vision to responsible parties within the organization. It fails to translate the vision into measureable operational goals.

It provides limited guidance about which metrics to choose.

Which of the following provides an example of what AFI strategy framework is used for? -Using AFI, the Quest Auto firm was able to implement a strategy that produced high-quality cars more efficiently and thereby reduced costs. -Using AFI, the Fine Dine Restaurant Group was able to improve employee benefits and thereby increase employee loyalty. -Using AFI, the Pure Tea Group was able to reduce the pollution it caused while processing tea and thereby receive an award. -Using AFI, the Mossimo Apparel Company was able to implement a strategy that allowed them to give more money to charities and thereby gain good press.

Using AFI, the Quest Auto firm was able to implement a strategy that produced high-quality cars more efficiently and thereby reduced costs.

The tenet behind the triple-bottom-line is that a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy. a firm's return on revenue can be broken down into three ratios: COGS/Revenue, R&D/Revenue, and SG&A/Revenue. a firm should solely focus on increasing the economic value created to/for its customers. a firm's primary objective should be increasing the total returns to its shareholders.

a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy.

In a firm's external environment, ________trends primarily capture population characteristics related to age, gender, family size, ethnicity, sexual orientation, religion, and socioeconomic class. ecological demographic economic political

demographic

Blackzim Wireless is a cellular service provider that charges its customers $1 for three hours of talk time. So, if a customer's talk time for a month is 60 hours, the company charges him or her $20 at the end of the month. Which of the following business models does this best illustrate? pay-as-you-go subscription-based razor-razor-blade freemium

pay-as-you-go

A firm's ________ relates to its ability to create value for customers (V) while containing the cost to do so (C). advantage of the marketplace industry effects industry analysis strategic position

strategic position

Through ________, a firm puts its guiding policy into practice by employing a set of coherent actions. -strategy formulation -strategy analysis -strategy implementation -strategy control

strategy implementation

One of the reasons that Circuit City filed for bankruptcy was due to its inability to reinvest, hone, and upgrade its once impressive resource base. Ultimately, Circuit City's core competences became core rigidities. strategic resources. value chain activities. costly to imitate

core rigidities.

________ is best described as a measure of how effectively capital is being used by a firm to generate revenue. Working capital turnover Risk capital Revenue per employee Return on revenue

Working capital turnover

SonronMedia sells books by having salespeople set up appointments with potential customers and give them a sales pitch for the product. When a salesperson sells a book, he or she gets a predetermined percentage commission. This type of business model is called bundling. a freemium. an agency. wholesale.

an agency.

Bill's Auto & Airplane Repair shop is able to generate a positive net income of $10,000 a week; this is the industry average. We can conclude that since he has a positive net income, he also has a competitive parity in the industry. —competitive advantage is achieved since Bill's Auto & Airplane Repair shop has a positive net income. —competitive parity is achieved by generating average returns, relative to competition in a given industry. —Bill's Auto & Airplane Repair shop more than likely has a sustained competitive advantage since his business is diversified. —competitive advantage is achieved through profitability alone.

competitive parity is achieved by generating average returns, relative to competition in a given industry.

A ________ is best described as any activity a firm pursues to explore and develop new products and processes, new markets, or new ventures. -corrective action -supply chain -value chain -strategic initiative

strategic initiative

Which of the following best represents a customer-oriented vision statement? -"We aim to build the fastest computing devices in the World." -"We provide solutions to professional communication needs." -"To be the safest, most progressive North American railroad." -"We are in the typewriter business."

"We provide solutions to professional communication needs."

Which of the following is an example of competitive parity? -A firm manufactures higher-quality wall clocks than its competitors. -A firm provides wall clocks that its consumers value more than other wall clocks. -A firm produces a similar number of wall clocks at a similar cost as its competitors. -A firm sells wall clocks at a lower price than its competitors.

A firm produces a similar number of wall clocks at a similar cost as its competitors.

Which of the following is an example of competitive parity? -A firm manufactures higher-quality wall clocks than its competitors. -A firm sells wall clocks at a lower price than its competitors. -A firm provides wall clocks that its consumers value more than other wall clocks. -A firm produces a similar number of wall clocks at a similar cost as its competitors.

A firm produces a similar number of wall clocks at a similar cost as its competitors.

Amanda is a management consultant for a soda manufacturer that wants to expand into health drinks such as green tea and after-workout drinks. Based on what you have read, which of these is sensible advice for Amanda to offer her client? "Carefully consider the entry choices over time before making a decision." "Focus on what your company does well rather than trying to expand into untried areas." "Your best bet is to undercut competitors' prices and lure them into a price war." "Pinpoint the best time to enter this new market, and then make a yes-or-no decision quickly."

"Carefully consider the entry choices over time before making a decision."

Cartzy Inc., Cartific Inc., and Clustercart Inc., are three consumer-product retailing companies. Their products consist primarily of day-to-day items that are easy to imitate and sell. All three companies use the same resources and capabilities in the production and distribution of their products. Judging from the market conditions described in this scenario, which of the following statements is true? Resource immobility of the firms will be low. Barriers to entry within the industry will be high. Any advantage that one firm has will be short-lived. The industry structure will be far from perfect competition.

Any advantage that one firm has will be short-lived.

Upper management at ComfyShoe Inc., a manufacturer of insoles for shoes, wants to work on improving the product lines it already has without taking on other challenges at this time. Which of the following vision statements reflects that goal? -ComfyShoe Inc. wants to always satisfy the consumers who purchase insoles. -ComfyShoe Inc. wants to be the best manufacturer of insoles in the industry. -ComfyShoe Inc. wants to adapt their insoles to the changing demands of consumers. -ComfyShoe Inc. wants to provide the best benefits for employees in the insole industry.

ComfyShoe Inc. wants to be the best manufacturer of insoles in the industry.

Which of the following is an advantage of applying the economic value creation perspective to assess a firm's performance? It is the most efficient tool for assessing corporate-level competitive advantage of highly diversified companies with large product portfolios. When the need for "hard numbers" arises, managers and analysts rely on economic value creation perspective to measure competitive advantage. Arriving at the economic value created is easy because determining the value of a good in the eyes of consumers is a simple task. In economic value perspective, analysts not only consider historical costs, but also opportunity costs.

In economic value perspective, analysts not only consider historical costs, but also opportunity costs.

Which of the following statements accurately describes a firm's resource stock? Resource stocks are a firm's level of resources that are common to competitors. Resource stocks are a firm's current level of intangible resources. Resource stocks are a firm's level of investments to maintain or build a resource. Resource stocks are a firm's future estimate of both tangible and intangible resources.

Resource stocks are a firm's current level of intangible resources.

Bill's Auto & Airplane Repair shop is able to generate a positive net income of $10,000 a week; this is the industry average. We can conclude that since he has a positive net income, he also has a competitive parity in the industry. —competitive advantage is achieved since Bill's Auto & Airplane Repair shop has a positive net income. —Bill's Auto & Airplane Repair shop more than likely has a sustained competitive advantage since his business is diversified. —competitive parity is achieved by generating average returns, relative to competition in a given industry. —competitive advantage is achieved through profitability alone.

competitive parity is achieved by generating average returns, relative to competition in a given industry.

Economic value creation is best expressed as producer surplus minus consumer surplus. producer surplus plus firm profit. consumer surplus plus firm profit. consumer surplus minus cost of production.

consumer surplus plus firm profit.

Batt Packs recently came under criticism when a newspaper article revealed that the company's production plant had leaked a chemical compound into a sensitive wetland ecosystem. Although use of the chemical was not technically prohibited by law, the local government levied a small fine for cleaning up the spill. Environmental groups, however, argued that continued use of the chemical was damaging to the local wildlife and threatened to organize a boycott against Batt Packs. What should Batt Packs do to ensure that it meets its ethical responsibilities? -move its production facilities to an area that is less concerned with environmental issues -pay the fine levied by the local government and resume operations -design batteries without the chemical and market them as environmentally friendly -take out an advertisement arguing that use of the chemical is perfectly legal

design batteries without the chemical and market them as environmentally friendly

TalkaLot Inc. is a cell phone manufacturing company. Its latest range of smartphones are visually similar to the Y-series range of smartphones from Talkie Gen Inc., in terms of its shape and look-and-feel. Which of the following strategies has TalkaLot Inc. used to replicate the valuable and rare resource of Talkie Gen Inc.? substitution strategic equivalence direct imitation innovation

direct imitation

A(n) ________is best described as the strategic option that top managers decide most closely matches the current reality and which is then executed. -dominant strategic plan -realized strategy -bottom-up emergent strategy -executive summary

dominant strategic plan

After carefully assessing the market potential for solar-powered mobile devices, the top-level executives of We Know Inc. decided that the company would be launching a line of solar-powered tablets within the next two years. This would mean that the tablet division would need to immediately begin research and development efforts. Which of the following strategies in the planned emergence model does this best illustrate? -intended strategy -tactical strategy -emergent strategy -unrealized strategy

intended strategy

ECO Jeans, Inc. had a mission to become the leading producer of environmentally friendly blue jeans, an emerging and in-demand category in the apparel industry. Its strategy involved leveraging a network of organic cotton farmers and suppliers of environmentally responsible synthetic materials to create a product that is durable, attractive, affordable, and 100% recyclable. However, because it did not upgrade its outdated production facilities, ECO Jeans could not assemble its products at a low-enough cost to offer the jeans at a price that was attractive to customers. ECO Jeans' strategy failed because -the company did not stake out a unique strategy position. -it was not backed up with strategic commitments. -managers did not live by the company's core values. -it failed to consider the competitive challenge.

it was not backed up with strategic commitments.

WeBreak4Bikes Inc. has a new U.S.-based client in the bicycle industry. The client's company produces only bicycles for riding on the road. The bicycles are used for reliable general purpose transportation. When asked to identify a potential substitute for the bicycle industry from the Five Forces perspective, you would select hot air balloons. None of these are substitutes. tractors. motorcycles.

motorcycles.A firm's ________ relates to its ability to create value for customers (V) while containing the cost to do so (C). advantage of the marketplace industry effects industry analysis strategic position

All Signal Inc., a telephone service provider, has a large user base mainly because phone calls and messages between all All Signal users are free. When a person switches to an All Signals network, his or her entire network of family and friends is likely to switch to the same network to receive the benefit of free calls and messages. In addition, an existing user who gets a new user to register with All Signal Inc. is given a free wireless connection. This has helped to keep competition away from All Signal. In this scenario, which of the following factors is acting as an entry barrier for All Signal Inc.? economies of scale high fixed costs high capital requirement network effects

network effects

Which of the following is typically an economic responsibility of a firm? -sourcing raw materials from highly developed countries donating resources, in terms of money and time, toward community -development -helping a nation increase its import of goods and services -paying adequate returns to the firm's stockholders on the capital invested by them

paying adequate returns to the firm's stockholders on the capital invested by them

As the CEO of a conglomerate, Sarah Cane exhibited her strong commitment toward the company's core value that customers' well-being is more important than profit when she convinced the board of directors to liquidate the company's pesticide subsidiary. The pesticide brand sold by her company was a major revenue earner in lesser-developed nations, but studies indicate that it is a carcinogen. Eva persuaded the board that the company had to be responsible toward society. In this scenario, Sarah has demonstrated -Machiavellianism. -intrapreneurship. -strategic leadership. -individualism.

strategic leadership.

The management of a company is assessing the value of all the tangible resources the company owns. Which of the following will be included in this assessment? a reputation for fast customer service a culture of proactive communication patents for electronic components the punch presses that produce parts

the punch presses that produce parts