WPC 470 Final

Which of the following is an attribute of a successful acquisition? a. Merged firm maintains moderate to high debt position b. Acquisition is unfriendly c. Acquiring firm conducts ineffective due diligence to select target firms and effectively evaluate the target firms' health d. Acquiring firm has financial slack

Acquiring firm has financial slack

How does diversification and firm size impact top managers of a firm? a. As a firm diversifies, its size increases, as does executive compensation. b. As a firm diversifies, its size decreases, as does executive compensation. c. As a firm diversifies, its size increases, while executive compensation decreases. d. As a firm diversifies, its size decreases, while executive compensation increases.

As a firm diversifies, its size increases, as does executive compensation.

An appliance company is considering entering the global market. It is unsure of what steps to take and is looking for a cost-effective method to work with a company that is already in the hosting country. Based on these preferences, which of the following modes of entry should the company choose? a. Exporting b. Setting up a greenfield venture c. Entering into a strategic alliance d. Making a cross-border acquisition

Entering into a strategic alliance

What is a critical element for developing and managing technology-based capabilities while using strategic alliances? a.Establishing proper rollout procedures for the technology between partners b.Establishing profit performance measures between partners c.Establishing trust between partners d.Flowcharting the new technology between partners

Establishing trust between partners

A stable alliance network is formed primarily to do what? a. Explore new ideas that may lead to product innovation b. Allow partners to develop new markets c. Exploit economies of scale and/or scope that exist between the partners. d. Enable partners to gain entry into new markets

Exploit economies of scale and/or scope that exist between the partners.

Which of the following relates to a firm's resources and the flexibility they provide? a. Ability b. Awareness c. Incentive d. Motivation

ability

A cost leadership strategy is one in which: a. customers perceive a company's products to be superior to competitor products. b. a company uses process innovations, such as advanced production or distribution methods, to operate efficiently. c. a firm produces nonstandardized products that deliver superior value to customers through innovation. d. a firm must consistently upgrade its product features to keep pace with customers' expectations for value.

a company uses process innovations, such as advanced production or distribution methods, to operate efficiently.

Which of the following is a market-based move that firms take to fine-tune a strategy? a. Competitive action b. Strategic response c. Strategic action d. Tactical action

tactical action

A _____ is composed of individuals who are responsible for making certain a company uses the strategic management process, especially to select and implement strategies. a. Strategy implementation team b. Strategy department c. Business development team d. Top management team

top management team

Resources are _____ when they allow a firm to take advantage of opportunities or neutralize threats in its external environment. a.rare b.costly to imitate c.valuable d.non-substitutable

valuable

The need to create _____ for stakeholders is a primary influence on a firm's decisions to engage in merger and acquisition activity. a. growth b. value c. profitability d. shares

value

Which of the following is NOT a consequence of the Sarbanes-Oxley Act (SOX)? a.A decreased number of foreign firm listings resulted on U.S. stock exchanges. b.An increased number of IPOs (initial public offerings) were legislated. c.Internal auditing scrutiny in firms' financial reporting improved. d.Section 404 increased costs for firms.

An increased number of IPOs (initial public offerings) were legislated.

Which of the following represents a risk for companies pursuing a cost leadership strategy? a. Failure to provide crisp and identifiable differentiation to customers in the form of a firm's product b. Counterfeit versions of a company's products c. Pricing that is higher than customers' perceived value of a quality product d. Competitors' innovations resulting in their ability to drive costs lower

Competitors' innovations resulting in their ability to drive costs lower

Which of the following statements about diffuse ownership is true? a.As ownership of the corporation is diffused, shareholders' ability to monitor managerial decisions strengthens. b.Diffuse ownership makes it difficult for owners to effectively coordinate their actions. c.Diffuse ownership often results in increased shareholder value. d.Diffuse ownership occurs when an individual holds both the CEO and chair of the board titles.

Diffuse ownership makes it difficult for owners to effectively coordinate their actions.

Which of the following strategies helps a firm concentrate on understanding its customers and their needs with greater clarity as a foundation for innovation? a.Market segmentation strategy b.Business model strategy c.Digital strategy d.Cost leadership strategy

Digital strategy

What are the two ways an unrelated diversification strategy can create value through financial economies? a. Efficient external capital allocations and the restructuring of acquired allocations b. Efficient internal capital allocations and the restructuring of acquired assets c. Efficient external capital allocations and the restructuring of acquired assets d. Inefficient internal capital allocations and the restructuring of acquired assets

Efficient internal capital allocations and the restructuring of acquired assets

he managers at Garcia Manufacturing are considering two alliance options. One is with a domestic company, and the other is with a company located in another country. What research findings might the managers want to take into account when making their decision? a.Firms with foreign operations have shorter survival rates than domestic-only firms. b.Firms with foreign operations have longer survival rates than domestic-only firms. c.Firms with foreign operations face stricter regulations than domestic-only firms. d.Firms with foreign operations have looser regulations than domestic-only firms.

Firms with foreign operations have longer survival rates than domestic-only firms.

Target is a company that focuses on reasonable prices for goods that are of high quality, unlike its competitors. Walmart has a focus on cutting costs to save as much money as possible for its customers and has historically not focused on quality. Target has grown due to which strategy? a. Cost leadership b. Integrated cost leadership/differentiation strategy c. Innovation d. Formalization

Integrated cost leadership/differentiation strategy

A firm owns a wide variety of consumer goods businesses. Its portfolio includes a grocery store, shoe store, and gas station. How might the diversification of its businesses impact its ability to have successful acquisitions? a. Managers are unequipped to evaluate the success of businesses on a deeper level than finances. b. Managers are too focused on new acquisitions to maintain the success of the firm's current businesses. c. The firm is used to service-based businesses. d. Managers have been successful at juggling several different businesses.

Managers are unequipped to evaluate the success of businesses on a deeper level than finances.

A convenience store chain recently implemented an international diversification strategy by opening stores in Canada, Australia, and several South American countries. As a U.S.-based company, the chain is still actively learning how to manage its new geographical diversification. Six months in, the firm has seen a drop in its return on investment. Should executives be concerned for the firm's future? a. Yes, the firm should see a quick increase in return on investment since there are more stores for profits to be made from. b. No, typically when a firm implements an international diversification strategy, its return on investment decreases initially and then increases quickly as the firm learns how to manage the increased geographical diversification it has created. c. No, the firm should see its return on investment drop and then increase gradually to match its return on investment before implementing an international diversification strategy. d. Yes, the firm should have kept its previous rate of return on investment before implementing an international diversification strategy.

No, typically when a firm implements an international diversification strategy, its return on investment decreases initially and then increases quickly as the firm learns how to manage the increased geographical diversification it has created.

In order to remain relevant, firms must explore opportunities to maintain or increase their competitive advantage at all times. In doing so, some opportunities may be out of reach of the firm's normal capabilities. By entering into strategic alliances, how can a firm achieve competitive advantage? a. Partnering with another firm in a strategic alliance and trading valuable resources enables both firms to further develop their products or markets to gain competitive advantage. b. Both firms can achieve competitive advantage over one another, even if they are operating in the same product market, by using each other's most valuable resources. c. Both firms can behave opportunistically towards one another to keep the other from gaining competitive advantage. d. One firm can gain competitive advantage by taking advantage of its partner's resources and giving its partner less valuable resources.

Partnering with another firm in a strategic alliance and trading valuable resources enables both firms to further develop their products or markets to gain competitive advantage.

Which of the following statements about an organization's stakeholders is true? a.Not all organizations have stakeholders. b.Stakeholders have enforceable claims on the firm's performance. c.All stakeholders have the same level of influence in an organization. d.Stakeholder relationships are important but cannot be a source of competitive advantage.

Stakeholders have enforceable claims on the firm's performance.

People buy products from Soco Outfitters because it is a brand name they know and trust. Soco's costly-to-imitate capabilities arise from: a.an ambiguous cause. b.social complexity. c.a historical source. d.interpersonal relationships.

a historical source

Compared with the general environment, the industry environment has _____ effect on the competitive actions and responses a firm takes to succeed. a.a similar b.a less direct c.a more direct d.no

a more direct

Ishanti owns the only yoga studio in town. However, a national gym is opening in a few months. Historically, businesses like hers have closed after the national chain opened nearby. Which of the following options should Ishanti implement? a. A competitive response b. A strategic action c. A strategic response d. A tactical action

a strategic action

The ongoing set of competitive actions and competitive responses that occurs among firms as they maneuver for an advantageous market position is: a. competitive behavior. b. competitive dynamics. c. competitive rivalry. d. multimarket competition

competitive rivalry

Rumor has it a new restaurant is coming to town called Italia Noodles. However, the owners are waiting to compare market commonalities and resource similarities to other local Italian restaurants. Italia Noodles is conducting a: a. tactical action plan. b. competitive action. c. strategic action. d. competitor analysis.

competitor analysis

A strategy through which a firm collaborates with one or more companies to expand its operations is called: a. corporate-level cooperative strategy. b. diversifying strategic alliance. c. synergistic strategic alliance. d. cross-border strategic alliance.

corporate level cooperative strategy

The extent to which a firm's revenues or profits are derived from a particular market is known as market: a.dominance. b.dependence. c.leadership. d.strategy.

dependence

Un the model of competitive reality, which group of activities follows the competitor analysis activities? a.Market commonality b.Resource similarity c.Drivers of competitive behavior d.Competitive rivalry

drivers of competitive behavior

What is the trend for the number of firms using a transnational international corporate-level strategy? a.Increasing b.Decreasing c.About the same (no increases or decreases) d.No clear trend

increasing

The _____ diversification strategy is associated with intangible resources that cannot be easily imitated. a.related constrained b.related linked c.unrelated d.unrelated constrained

related linked

TamBoats makes small, personal submarines. Another firm created an innovative tool that can be stored in a small space. Which of the following can TamBoats use to quickly develop its own tool with similar characteristics? a.Review its own products. b.Establish a competitive advantage. c.Research. d.Reverse engineer the product

reverse engineer the product

During a meeting, your client told you that a new firm had approached her and presented its products to her. The new firm has the potential to become a rival. Which of the following should you research to discover the potential rival's capabilities? a. Its future objectives b. Its assumptions c. Its current strategy d. Its strengths and weaknesses

strengths and weaknesses

When a target firm does not solicit an acquiring firm's bid, it is known as a(n): a. acquisition. b. merger. c. takeover. d. cross-border acquisition.

takeover

Which of the following is believed to be the strongest determinant of whether a merger or an acquisition will be successful? a.The integration process b.The level of relatedness of the two businesses c.The ability of the firms to achieve synergy d.The type of diversification strategy chosen

the integration process

Which of the following statements about a global strategy is true? a.The global strategy offers fewer opportunities to take innovations developed at the corporate level and apply them in other markets. b.Compared to a multidomestic strategy, the global strategy seeks greater levels of standardization of products across country markets. c.The global strategy is difficult to use because of its conflicting goals. d.A global strategy is most appropriate for use when the differences between the markets a firm serves and the customers in them are significant.

Compared to a multidomestic strategy, the global strategy seeks greater levels of standardization of products across country markets.

Which of the following is a reason(s) that keeps managers from selfishly diversifying the firm for higher compensation? a. Concerns for their reputation and strong managerial talent market b. Concerns for their reputation and weak managerial talent market c. Fear that the firm would lose value d. To avoid the responsibility of a more highly complex firm

Concerns for their reputation and strong managerial talent market

Which of the following statements regarding managerial succession issues is true? a.A benefit in choosing a new CEO from inside the firm is that this usually results in lower turnover among existing personnel. b.A firm will be less likely to hire a CEO from the external managerial labor market when its performance is declining. c.CEOs selected from outside the firm tend to benefit from their "feel" for what will and will not "work" in the firm. d.Firms commonly follow the preference expressed by employees to hire outsiders to succeed CEOs.

A benefit in choosing a new CEO from inside the firm is that this usually results in lower turnover among existing personnel.

How is a business model different from a business-level strategy? a. A business model focuses on capturing internal value for stakeholders while a business-level strategy focuses on creating external value for customers. b. A business model describes what a firm does while a business-level strategy describes how it does it. c. A business model defines the products or services a firm offers while a business-level strategy describes how the firm earns a profit. d. A business model is a path forward while a business-level strategy is a framework.

A business model describes what a firm does while a business-level strategy describes how it does it.

What is the definition of a functional structure? a. An organizational structure that has proven to be successful and works correctly for all businesses b. A structure that has the owner as a manager who also handles all day-to-day activities c. A group of industry experts and experts of other industries d. A chief executive officer and a limited corporate staff, with functional line managers in dominant organizational areas

A chief executive officer and a limited corporate staff, with functional line managers in dominant organizational areas

What is an international diversification strategy? a. A strategy through which a firm expands the sales of its goods or services across the borders of global regions and countries into a potentially large number of geographic locations or markets b. An international strategy through which the firm seeks to achieve both global efficiency and local responsiveness c. An international strategy in which strategic and operating decisions are decentralized to the strategic business units in individual countries or regions for allowing each unit the opportunity to tailor its products to the local market d. A strategy through which the firm sells its goods or services outside its domestic market

. A strategy through which a firm expands the sales of its goods or services across the borders of global regions and countries into a potentially large number of geographic locations or markets

Which of the following capabilities meets the criteria for being a core competency, in that it is rare, valuable, costly to imitate, and nonsubstitutable? a. The human resources function b. A company's history and brand c. A manufacturing facility d. The CEO

A company's history and brand

In which of the following scenarios would a firm choose to downsize rather than downscope? a. A firm has excess resources after acquiring another firm. b. A firm wants to cut business units that are unrelated to its core business. c. A firm wants to correct managerial mistakes. d. A firm wants to build resources and expand operations

A firm has excess resources after acquiring another firm.

What is organizational structure? a. The plan outlining how a company generates revenue and projects its growth b. The geographical location in which a company decides to do business c. A firm's formal reporting relationships, including procedures, controls, authority, and decision-making processes d. The personality of a company and the key elements to motivating employees and understanding why they want to work at that company

A firm's formal reporting relationships, including procedures, controls, authority, and decision-making processes

What is explicit collusion? a. A form of competition-reducing strategy in which several firms indirectly coordinate their production and pricing decisions by observing each other's actions and responses b. A form of competition-reducing strategy in which two or more firms negotiate directly to determine the amount to produce and the prices for the product c. A form of competition-reducing strategy in which firms do not take competitive actions against rivals d. A form of competition-reducing strategy in which firms share some of their resources from different stages of the value chain to create competitive advantage

A form of competition-reducing strategy in which two or more firms negotiate directly to determine the amount to produce and the prices for the product

What is an agency relationship? a. A group of people who are in disagreement b. A situation in which one party is responsible for the actions of another in a workplace setting c. A situation in which two parties decide to invest and act as one for a united goal d. A situation in which one party delegates decision-making responsibility to a second party for compensation

A situation in which one party delegates decision-making responsibility to a second party for compensation

Which is an alternate definition for "poison pill"? a. A contract between the target firm and the potential acquirer specifying that the acquirer will not purchase additional shares of the target firm for a specified period of time in exchange for a fee paid by the target firm b. The repurchase of the target firm's shares of stock that were obtained by the acquiring firm at a premium in exchange for an agreement that the acquirer will no longer target the company for takeover c. A strategy whereby a company decides to increase the number of overall shares, which will both dilute the hostile company's shares and increase the cost of the company overall, making the company less appealing to take over d. A lump-sum payment of cash that is given to one or more top-level managers when the firm is acquired in a takeover bid

A strategy whereby a company decides to increase the number of overall shares, which will both dilute the hostile company's shares and increase the cost of the company overall, making the company less appealing to take over

What is a simple structure? a. A structure in which the owner-manager makes all major decisions and monitors all activities while the staff serves as an extension of the manager's supervisory authority b. A non-complex structure that has a small probability of being successful c. A structure that consists of a chief executive officer and a limited corporate staff, with functional line managers in dominant organizational areas d. A structure in which manufacturing efficiency is the focus

A structure in which the owner-manager makes all major decisions and monitors all activities while the staff serves as an extension of the manager's supervisory authority

What is a distributed strategic network? a. An organizational structure used to manage international cooperative strategies b. A corporate office and operating divisions, each operating division representing a separate business or profit center in which the top corporate officer delegates responsibilities for day-to-day operations and business-unit strategy to division managers. c. An M-form consisting of three levels: corporate headquarters, strategic business units (SBUs), and SBU divisions. d. An M-form structure characterized by complete independence among the firm's divisions that compete for corporate resources.

An organizational structure used to manage international cooperative strategies

rule approved by the U.S. Securities and Exchange Commission (SEC) allows large shareholders (owning 1 to 5 percent of a company's stock) to nominate up to _____ percent of a company's board of directors. a.5 b.10 c.25 d.50

25

One reason managers may choose acquisitions over new product development is that an estimated _____ percent of innovations fail to achieve adequate returns. a.58 b.68 c.78 d.88

88

Which of the following would be considered a product market stakeholder? a. A private equity firm investing in a biomedical firm b. A local pipefitters union dealing with a plumbing contractor c. A member of an ownership family in a privately owned company d. A store manager of a retail chain

A local pipefitters union dealing with a plumbing contractor

Which of the following is an example of multimarket competition? a. Company A makes only sedans and SUVs. Company B makes semi-trailer trucks that transport products to retailers. b. Company A prints coloring books. Company B makes crayons and markers. c. Company A makes tomato sauce sold to consumers in grocery stores and to restaurants. Company B sells tomato sauce to consumers in grocery stores. d. Company A sells property insurance in Ohio. Company B sells property insurance in California.

Company A makes tomato sauce sold to consumers in grocery stores and to restaurants. Company B sells tomato sauce to consumers in grocery stores.

Kevin has been charged with recommending a target company for his firm's acquisition. He found a number of potential candidates and has narrowed that list down to three. Kevin knows that the acquisition will have a higher likelihood of success if the acquired firm has resources that are complementary to his firm's core business. How can he identify the firm with the strongest complementarities? a.Conduct a due diligence of the firms. b.Examine each firm's financial health. c.Conduct negotiations with each firm. d.Create an integration plan.

Conduct a due diligence of the firms.

EdgeWise, Inc., a U.S. company, has decided to explore the possibility of offshoring in order to meet certain financial benchmarks. Which of the following activities would fall within that category? a.Selling finished products in Asia b.Purchasing a competitor that operates in Europe c.Contracting with a company in India to provide data-entry services d.Opening a plant in South America

Contracting with a company in India to provide data-entry services

What should the CEO of a company suggest to another CEO if their companies have a very similar product but do not share the same market? a. Create a horizontal alliance so that each firm can compete better in its respective market b. Compete c. Implement a flexible structure d. Implement environmentally safe initiatives

Create a horizontal alliance so that each firm can compete better in its respective market

Which of the following statements about a firm's customers is true? a.Customers are the most obvious stakeholders, at least in U.S. organizations. b.Customers are part of its capital market stakeholders. c.Customers are more important than its other product market stakeholders. d.Customers prefer that investors receive a maximum return on their investments.

Customers are more important than its other product market stakeholders.

Which of the following is NOT a concern of a competitor analysis? a. Information about what drives the competitor, as shown by its future objectives b. Data on what the competitor's available funds are for innovation, as shown by its balance sheet c. Information about what the competitor is doing and can do, as revealed by its current strategy d. Intelligence about what the competitor believes about the industry, as shown by its assumptions

Data on what the competitor's available funds are for innovation, as shown by its balance sheet

Tockit is a children's toy developer that uses the resource-based model of above-average returns. Which of the following steps does it use in its business? a. Study the external environment, especially the industry environment. b. Use the firm's strengths to implement the strategy. c. Find the most attractive industry in which to compete. d. Determine the firm's capabilities.

Determine the firm's capabilities.

James is a consultant who helps guide businesses in their growth. His current client has previously streamlined its supply chain by acquiring a few of its suppliers. This is an attempt to increase cost efficiency and control. After a few years of growth, the client's performance has plateaued. What is James likely to recommend? a. Volume increases b. Geography c. Diversification through products or business d. More integration

Diversification through products or business

The long-term outcomes of a leveraged buyout are higher performance and higher risk. What two short-term outcomes lead to these long-term outcomes? a. Reduced labor costs and reduced debt costs b. Reduced debt costs and emphasis on strategic controls c. Emphasis on strategic controls and high debt costs d. Reduced labor costs and high debt costs

Emphasis on strategic controls and high debt costs

Which of the following is a positive effect of downscoping? a. Firms have fewer employees that they have to compensate. b. Managerial effectiveness decreases. c. Firms spend less in operations costs. d. Firms refocus on their core business.

Firms refocus on their core business.

Which attributes of successful acquisitions are most likely to lead to lower premiums paid by the acquiring firm? a.Friendly acquisition and moderate debt position b.Friendly acquisition and effective due diligence c.Moderate debt position and effective due diligence d.Acquiring firm's financial slack and moderate debt position

Friendly acquisition and effective due diligence

The 2 major driving factors of Hypercompetition are

Global Economy and Technology.

How can firms implementing an international strategy become limited by diversification? a. Too many consumer cultures start to mirror one another as customers mold themselves to demand the same thing as a result of international diversification of the same products. b. Eventually, too many firms implement an international diversification strategy for similar products, making the market too saturated for any firm to be successful. c. Greater geographic dispersion across country borders results in increased costs of coordination between units and distribution of products. d. As a firm becomes more geographically dispersed, it loses its ability to keep track of its operations in terms of organization and costs.

Greater geographic dispersion across country borders results in increased costs of coordination between units and distribution of products.

_____ has _____ success as a hostile takeover defense strategy and _____ effects on shareholder wealth. a. A golden parachute; high; positive b. A standstill agreement; low; positive c. A capital structure change; high; inconclusive d. Greenmail; medium; negative

Greenmail; medium; negative

Which of the following is a benefit that product diversification can create for top-level managers that shareholders do not enjoy? a.It increases top-level managers' employment risk. b.It provides an opportunity for top-level managers to increase their compensation. c.It allows top-level managers the opportunity to make strategic decisions that maximize their personal welfare. d.It decreases the complexity of managing a firm.

It provides an opportunity for top-level managers to increase their compensation.

A hospital system operates 22 physicians' offices, five skilled nursing facilities, and two hospitals. The system employs more than 500 people directly and is affiliated with more than 100 additional physicians. The system offers a wide breadth of medical services, including all of the major specialties. The system was recently recognized as the top cardiac hospital in the state. Which of the following represents the company's capabilities? a. The hospital buildings and facilities b. The staff of 500 people c. Its complete list of medical services d. Its cardiac services

Its complete list of medical services

Which of the following statements does NOT describe a challenge associated with the integration process of an acquisition? a. Meld two or more similar businesses' cultures b. Link different financial and control systems c. Build effective working relationships d. Determine the leadership structure and those who fill it for the integrated firm

Meld two or more similar businesses' cultures

Which of the following is an assumption of the industrial organization (I/O) model? a.Organizational decision makers are rational individuals who are committed to acting in the firm's best interests. b.Resources and capabilities are not highly mobile across firms. c.Differences in firms' performances across time are due primarily to their unique resources and capabilities. d.The internal environment imposes pressures and constraints that determine the firm's strategies.

Organizational decision makers are rational individuals who are committed to acting in the firm's best interests.

TaylorTech, a high-quality metals finishing company, is struggling with its margins. TaylorTech has raw materials delivered to its foundry in Pittsburgh, where the company melts the metals into castings. The firm then polishes them as a value-added process before selling the custom castings to customers. Its unique polishing process is rare in the United States, is very secretive, and results in a more efficient cast that commands a premium price. Unfortunately, the casting process is becoming more expensive because of increased wage pressure from the workers specializing in casting. With these issues, TaylorTech has to make a decision. Which of the following is the most viable option for TaylorTech to increase its margins? a. Lay off team members across the company b. Outsource the casting process c. Stop offering the polishing process d. Hire less-skilled workers

Outsource the casting process

Procter & Gamble (P&G) is a consumer products company that is consistently implementing scanning systems of the environment. The company wants to identify early signals of environmental changes and trends. P&G's competitors also frequently utilize scanning systems but are not as competitive as P&G. Which of the following could be the reason for P&G's competitiveness? a. P&G takes quick action on ambiguous, incomplete, or unconnected data. b. The competitors are less concerned with competitive advantages. c. P&G's reports are more robust and contain insider information. d. The competitors are not as educated as P&G's executives

P&G takes quick action on ambiguous, incomplete, or unconnected data.

Which of the following approaches to differentiation would present a high-end, luxury handbag and footwear designer with the best opportunity to differentiate itself from competitors? a.Responsive customer service b.Technological leadership c.Perceived prestige and status d.Rapid product innovations

Perceived prestige and status

Your company, which transports medical equipment to emerging nations, is conducting a political risk analysis before signing a contract to transport equipment within a South American country. Which of the following findings in the political risk analysis would indicate that the company should NOT sign the contract? a. Potential nationalization of invested assets b. Devaluation of the country's currency c. Uncertain prices for critical commodities d. High government deb

Potential nationalization of invested assets

Which of the following characteristics best describes tactical actions? a. Relatively easy to implement and reverse b. Involve significant resources c. Difficult to implement and reverse d. Fully counter the effects of a competitor's actions

Relatively easy to implement and reverse

Which of the following statements regarding resource dissimilarity is NOT true? a.Resource dissimilarity influences the competitive actions and responses firms choose to take. b.The firm with a resource disadvantage may take longer to respond to the acting firm's competitive action. c.Resource dissimilarity can make it difficult for smaller firms to respond effectively to a larger firm's competitive actions or responses. d.Resource dissimilarity provides an advantage to smaller, local firms when competing against larger, national firms.

Resource dissimilarity provides an advantage to smaller, local firms when competing against larger, national firms

An industry-leading technology firm utilizing a differentiation strategy has decided to increase prices on its patented product to bolster profit margins and deliver a higher return to investors. Consider the impact of this decision in light of the forces of competition. Which of the following situations should the firm prioritize? a. Potential entrants b. Bargaining power of suppliers c. Bargaining power of buyers d. Rivalry with existing competitors

Rivalry with existing competitors

Which of the following is NOT an implication of strategic groups? a.Because firms within a group offer similar products to the same customers, the competitive rivalry among them can be intense. b.The strengths of the five forces differ across strategic groups. c.The closer the strategic groups are in terms of their strategies, the greater is the likelihood of rivalry between the groups. d.Strategic groups have less threats to each firm's profitability.

Strategic groups have less threats to each firm's profitability.

The main competitive advantage of a particular major U.S. technology firm is sourcing and procurement of raw materials. This company is facing increasing competition on price and is strongly considering outsourcing as a means of reducing costs. The LAST function this firm should consider outsourcing is: a.operations. b.supply-chain management. c.research and development. d.distribution.

Supply chain management

Research indicates that a competitive advantage in logistics is a primary strategy that creates the most value for a cost leadership strategy. Which of the following value-creating activities should be a focus for a company pursuing a cost leadership strategy? a. Supply-chain management b. Human resources c. Marketing d. Follow-up service

Supply-chain management

Why is it challenging for firms using international strategies to effectively use executive compensation as a mechanism for corporate governance? a. Communication barriers b. Cultural differences in expectations c. Differences in currency conversion rates d. The diversity and complexity of compensation plans across a corporation

The diversity and complexity of compensation plans across a corporation

When a firm takes over another firm in an unfriendly acquisition process, what is a challenge to its future success? a. The firm will have a high probability of synergy and competitive advantage by maintaining strengths. b. The firm will struggle to maintain long-term competitive advantage in markets. c. The firm will struggle to effectively integrate its operations. d. Financing will be harder to obtain.

The firm will struggle to effectively integrate its operations.

Which of the following statements regarding intangible resources is true? a.They can be observed. b.They are relatively difficult for competitors to analyze and imitate. c.They can be quantified. d.They can be acquired quickly.

They are relatively difficult for competitors to analyze and imitate.

Which of the following countries is most ethnically diverse? a.Japan b.Germany c.Uganda d.South Korea

Uganda

Which of the following statements regarding the use of defense tactics by the target firm during a hostile takeover is NOT true? a.Defense tactics vary in their effectiveness as a defense to takeovers. b.In general, managers' use of defense tactics is considered to be self-serving in nature. c.Using takeover defenses increases the amount of pressure managers feel to seek short-term performance gains. d.Defense tactics can have both positive and negative effects on shareholder wealth.

Using takeover defenses increases the amount of pressure managers feel to seek short-term performance gains.

Joplin Tires' corporate website states "Joplin Tires strives to be the top-selling tire manufacturer in the United States." This statement is Joplin Tires': a.mission. b.statement of organizational culture. c.code of ethics. d.vision.

Vision

Your firm creates trivia games focused on specific sports teams. A large gaming company has just started advertising a new line of games that you fear will cut into your market share. Which of the following is likely true about your firm's response? a.Your firm will ignore your new competitor. b.Your firm's response is likely to be swift and strong. c.Your firm's response will consist of only small tactical changes. d.Your firm's response is likely to be delayed until you can evaluate the long-term effects of your competitor's attack.

Your firm's response is likely to be swift and strong.

The ideal long-term strategic direction has two parts: _____ and _____. a.exporting; importing b.acquisitions; licensing c.a core ideology; an envisioned future d.implementation; accomplishments

a core idelogy, an envisioned future

A firm whose operations are human-capital intensive would most likely use which of the following entry modes? a. Licensing b. A cross-border acquisition c. Exporting d. A greenfield venture

a cross border acquisition

Cisco is a technology company looking to diversify its portfolio and compete in a new market. After conducting a scan and forecast, the consultants hired by Cisco provide several options. In which of the following economic segments should Cisco seek to compete? a. A very stable economy with low growth potential b. An unstable, new economy that has an attractively high growth potential c. A stable economy with a declining growth potential d. A relatively stable economy with strong growth potential

a relatively stable economy with strong growth potential

Coyle Enterprises is a small company that recently entered the lawn equipment industry. In response, its main competitor, a large and well-established company in the industry, has increased its sales presence in the market. Coyle learns of this move, but does not respond. A lack of which of the following would likely be the primary reason that Coyle does not respond? a.Awareness b.Market commonality c.Ability d.Motivation

ability

ome strategic leaders who are committed to identifying the best organizational activities to take, regardless of their cultural origin, have been successful in building a short-term foundation to reach a long-term vision. Which of the following terms describes this type of leader? a. Risk averse b. Charismatic c. Ambicultural d. Long tenure

ambicultural

Austin works at Springfield Electronics. He had an idea for an improvement to one of Springfield's products that would increase customer value. He worked hard to sell the idea first to his manager and then to others in the company. Research and development (R&D) is currently in the process of researching and testing Austin's idea, and he remains apprised of its status so he is prepared to escort it to the next phase towards productions. Austin is engaging in _____ behavior. a.autonomous strategic b.induced strategic c.vertical tactical d.horizontal tactical

autonomous strategic

A software company that is seeking a sustained competitive advantage will constantly be facing obsolescence because of environmental change. To generate a sustained competitive advantage, this company must: a. develop strategies to push competitors out of the business early so it is not faced with technological pressures. b. capture as much revenue as it can quickly, and then close the business when technology surpasses it. c. be continually building its technological capabilities to develop new skills as technology advances so that it can offer constant upgrades to meet customers' needs. d. always hire new people to bring new experience and knowledge into the firm.

be continually building its technological capabilities to develop new skills as technology advances so that it can offer constant upgrades to meet customers' needs.

Autonomous strategic behavior is a(n) _____ process, while induced strategic behavior is a(n) _____ process. a.integrated; diversified b.diversified; integrated c.top-down; bottom-up d.bottom-up; top-down

bottom-up, top-down

A _____ describes what a firm does to create, deliver, and capture value for its stakeholders. a.business model b.strategic plan c.business-level strategy d.corporate-level strategy

business model

A firm combines individual tangible and intangible resources to create: a.assets. b.capabilities. c.competencies. d.advantages.

capabilities

Employee stock option plans (ESOPs), recapitalization, issuance of additional debt, and share buybacks are actions associated with which of the following hostile takeover defense strategies? a.Standstill agreement b.Golden parachute c.Greenmail d.Capital structure change

capita structure change

Interactions among the four determinants of national advantage influence a firm's: a. ability to be successful in its domestic market. b. choice of international business-level strategy. c. choice of national business-level strategy. d. competency within its domestic market

choice of international business-level strategy.

All of the following are the result of new changes to the organizational structure at McDonald's EXCEPT: a. reduced costs. b. cleaner facilities. c. increased effectiveness. d. improved customers' experience through technology

cleaner facilities

Capabilities are the: a. advanced degrees that are held by members of the senior leadership team. b. physical attributes of the company, including its buildings, machinery, and other assets. c. combination of tangible and intangible resources used to complete the organizational tasks required to produce, distribute, and service the goods or services the firm provides to customers. d. human capital, through knowledge and experience, applied to producing products.

combination of tangible and intangible resources used to complete the organizational tasks required to produce, distribute, and service the goods or services the firm provides to customers.

Strategic groups exist because: a. companies within the same industry may position themselves differently regarding distribution channels, market segments, and other differentiators, which affects their strategies. b. government regulators have different rules for companies based on the size of the company, geographic headquarters, and number of employees. c. customers want variety in the products and services they select, and different brands can serve customers' needs differently. d. industries are one-dimensional, and all businesses within an industry utilize the same resources and same strategies to achieve their goals

companies within the same industry may position themselves differently regarding distribution channels, market segments, and other differentiators, which affects their strategies.

Hypercompetition is a condition of rapidly escalating competition based on all of the following EXCEPT: a.competition to produce a competitive advantage based on economies of scale. b.price-quality positioning. c.competition to create new know-how and establish first-mover advantage. d.competition to protect or invade established product and/or geographic markets.

competition to produce a competitive advantage based on economies of scale.

A fast-food chain, Bob's Bigger Burgers, has just launched a campaign to market its new pound-and-a-half burger against its competitor, Lou's Burgers, who previously sold the biggest burger at a pound and a quarter. Bob's Bigger Burgers' strategic move against Lou's Burgers is a: a. competitive response. b. strategic response. c. tactical response. d. competitive action

competitive action

Awareness affects the extent to which the firm understands the consequences of its: a. product quality. b. competitive rivalry and dynamics. c. competitive motivation and ability. d. competitive actions and responses

competitive actions and responses.

By introducing Google Pay in response to Apple Pay, Google hopes to build and defend its competitive advantages and improve its market position through: a. competitive rivalry. b. competitive dynamics. c. competitive behavior. d. a competitor analysis.

competitive behavior

A strategy in which firms collaborate to achieve a shared objective is known as: a. corporate strategy. b. a strategic alliance. c. cooperative strategy. d. international strategy.

cooperative strategy

Which approach to managing cooperative strategies generally involves higher costs? a.Opportunity maximization b.Opportunity minimization c.Cost maximization d.Cost minimization

cost minimization

A differentiation strategy is one in which a firm: a. concentrates on ways to reduce cost as its primary focus. b. creates products that have features that customers value and are willing to pay a higher price for. c. has core competencies in production and distribution efficiencies to reduce required inputs. d. divides its customers into clusters of people with similar needs.

creates products that have features that customers value and are willing to pay a higher price for.

Acquisitions made between companies with headquarters in different countries are called _____ acquisitions. a.cross-border b.transglobal c.vertical nation d.cross-cultural

cross-border

One of the biggest economic risks of international strategy that can reduce the value of a firm's assets is: a. security risk. b. currency fluctuations. c. sufficient access to electrical power. d. the potential nationalization of invested assets.

currency fluctuations

Do German firms face agency problems to the same degree as U.S. firms? a. Yes, German firms have the same exact issues and difficulties as U.S. firms. b. Yes, German agencies have the same structures as U.S. agencies. c. No, many German firms are publicly owned by the government and its citizens. d. No, many German firms are managed and owned by the same individual.

d. No, many German firms are managed and owned by the same individual.

RXL and NuVal are two major telecommunications companies. They are in advanced talks for RXL to acquire NuVal, and RXL has hired an investment bank to exclusively complete the due-diligence process. RXL's acquisition performance will likely _____ because of this decision. a.not be affected b.increase c.decrease d.fail

decrease

A sporting goods company developed an innovative material for the manufacture of baseball bats. For many years, the material and its process for manufacturing served as a rare and valuable capability, distinguishing it from competitors. Unfortunately, many of the baseball leagues have been changing their regulations to outlaw bats made of this material because they constitute an unfair advantage for players. As part of its internal analysis, its leaders might: a. examine the trends in the industry to see what materials competitors are using in their bat manufacturing. b. lobby the sports leagues to ask them not to outlaw the bat material. c. determine if the company's core competency is in research and development of different materials or only in working with this material specifically. d. research other kinds of materials to find one that is not outlawed but that could be produced at a lower cost.

determine if the company's core competency is in research and development of different materials or only in working with this material specifically.

organizational stakeholders

employees, managers, nonmanagers

Because the resources and relationships among partners is complex, most R&D strategic alliances are what type? a. Equity b. Nonequity c. Cross-border d. Joint venture

equity

A firm that measures its success by performance standards that are previously established is one that has high: a. financial controls. b. strategic controls. c. structural stability. d. structural flexibility

financial controls

An assumption of the industrial organization (I/O) model of above-average returns that supports the need for a firm to find the most attractive industry in which to compete is that: a. the external environment imposes pressures and constraints that determine the strategies that would result in above-average returns. b. firms possess the same types of resources with value and those resources are mobile across companies. c. differences in resources and capabilities are the basis of competitive advantage. d. organizational decision makers are rational individuals who are committed to acting in the firm's best interests, as shown by their profit-maximizing behaviors.

firms possess the same types of resources with value and those resources are mobile across companies.

Which of the following statements about standard-cycle markets is true? a. Firms often obtain patents to protect, maintain, and extend a competitive advantage. b. There is a high velocity of change. c. Firms' competitive advantages are partially sustainable. d. Customer loyalty is less important.

firms' competitive advantages are partially sustainable.

A _____ is an entry mode through which a firm invests directly in another country or market by establishing a new wholly owned subsidiary. a.licensing agreement b.greenfield venture c.cross-border acquisition d.strategic alliance

greenfield venture

As part of its selection of a business-level strategy, a firm will decide which customers it will serve, what needs those customers have that it will satisfy, and: a. how it will satisfy those customers' needs using its core competencies to implement value-creating strategies. b. when it will implement its strategies to best optimize its exposure to customers and achieve a competitive advantage. c. where it will locate its resources and facilities to best serve its targeted customers and obtain the lowest costs of production. d. which functional teams and strategic leaders will be responsible for implementation of the business-level strategy.

how it will satisfy those customers' needs using its core competencies to implement value-creating strategies.

_____ capital refers to the knowledge and skills of a firm's entire workforce. a. Social b. Organizational c. Intellectual d. Human

human

The main objective of the collaborating firms in a cooperative strategy is to: a. increase competitive advantage. b. neutralize each other's competitive advantage. c. decrease the other's competitive advantage. d. decrease both partners' competitive advantage.

increase competitive advantage

To be successful, a firm utilizing an integrated cost leadership/differentiation strategy must: a. focus exclusively on improving its competence in all value chain activities. b. focus exclusively on innovative product design. c. reduce the number of customer segments it is trying to serve. d. increase the number of primary value chain activities and support functions in which it becomes competent.

increase the number of primary value chain activities and support functions in which it becomes competent.

Which of the following is a potential benefit of establishing CEO duality? a. Higher performance b. Faster response to change c. Increased crisis management d. Higher CEO monitoring

increased crisis management

Firms failing to perform the value-chain activities and support functions in an optimum manner when implementing the _____ strategy become "stuck in the middle." a.cost leadership b.focus c.differentiation d.integrated cost leadership/differentiation

integrated cost leadership/differentiation

Which of the following is an element of the economic segment? a. Income distribution b. Interest rates c. Age structure d. Ethnic mix

interest rates

What type of financial economy is undertaken to reduce risk among a firm's businesses? a. Internal capital market allocation b. Restructuring of assets c. Vertical integration d. Economies of scope

internal capital allocation

mission

is why we exist

A capability meets the criteria of being valuable when: a. it requires an investment of half of the company's financial assets. b. it is possessed by only the top tier of companies in the sector. c. it helps a firm exploit opportunities in its external environment. d. its causes and uses are unclear.

it helps a firm exploit opportunities in its external environment.

A supplier group is powerful when: a.it is less concentrated than the industry to which it sells. b.industry firms are a significant customer for the supplier group. c.suppliers' goods are critical to buyers' marketplace success. d.satisfactory substitute products are available to industry firms.

it is less concentrated than the industry to which it sells

A firm should analyze its internal organization as part of the strategic management process because: a. the firm is required to report its results to the government. b. it is the only method for identifying threats and opportunities to the business. c. without this study, strategic leaders do not have a working understanding of how their business operates. d. it provides the insights the firm requires to match what the firm can do with what the firm might do when formulating strategies

it provides the insights the firm requires to match what the firm can do with what the firm might do when formulating strategies.

External investors allocate capital by taking stakes in businesses with high growth and profitability potential. Which of the following is a disadvantage for external investors? a. Limited access to information b. Cannot estimate the performance of individual businesses c. Unlimited access to information d. Can understand the operational dynamics in large organizations

limited access to information

A single-business diversification strategy and a dominant-business diversification strategy are both examples of what level of diversification? a. Moderate to high level b. Very high level c. Low level d. Very low level

low level

Which of the following characteristics can be used to describe licensing as an entry mode? a. Low risk b. Shared costs c. Maximum control d. Time consuming

low risk

All of the following are examples of behavior known to contribute to the success of strategic alliances EXCEPT: a.maintaining a level of independent competitiveness. b.being trustworthy. c.consistently pursuing ways to combine partners' resources to create value. d.actively solving problems.

maintaining a level of independent competitiveness.

Managerial opportunism occurs when managers: a. seek the counsel of internal or external advisors. b. make decisions to satisfy their own self-interests. c. make strategic decisions to improve performance. d. agree to serve on other firms' boards of directors.

make decisions to satisfy their own self-interests.

Disney bought Pixar in 2004 to extend and begin a new partnership in its renewed focus on animation. In the deal, Steve Jobs, the CEO of Pixar at the time, vowed to preserve the independent nature of Pixar. Since then, the two have put out hits such as the Toy Story, The Incredibles, and Nemo franchises. This partnership is an example of a(n): a. merger. b. acquisition. c. joint venture. d. strategic alliance.

merger

Ranger Landscaping's website states the following: "Ranger Landscaping is a service-oriented business that provides lawn care and landscape design, installation, and maintenance. We are committed to a professional approach to our business and to providing our customers with individualized attention and 100 percent satisfaction." This statement represents Ranger Landscaping's: a.tagline. b.mission. c.vision. d.code of ethics.

mission

To be effective, a firm must complete which part of the external environmental analysis in order to understand its reputation among its stakeholders as the foundation for serving their needs? a.Scanning b.Monitoring c.Forecasting d.Assessing

monitoring

In general, cross-border strategic alliances are _____ and _____ than domestic strategic alliances. a.more expensive; less complex b.more expensive; less risky c.less complex; less risky d.more complex; riskier

more complex, riskier

Research suggests that having a competitive advantage in logistics creates _____ value with a _____ strategy than with a _____ strategy. a.more; cost leadership; differentiation b.less; cost leadership; differentiation c.more; differentiation; focus d.less; cost leadership; focus

more; cost leadership; differentiation

Sports Inc. has developed a shoe to compete with Air Jordans. In order to keep up with competitors and minimize competitor market power, the firm decides to sell branded sports equipment as well. By introducing another new business so soon outside of its shoe products, the firm stands to lose value. Sports Inc.'s reason for diversifying itself is to _____ by acquiring a _____. a. neutralize another firm's advantage; similar distribution outlet b. decrease another firm's advantage; similar distribution outlet c. increase its value; similar distribution outlet as a competitor d. decrease another firm's value; different distribution outlet

neutralize another firm's advantage; similar distribution outlet

All of the following are characteristics of the cost leadership strategy EXCEPT: a.simple reporting relationships. b.centralized corporate staff. c.new product development. d.few layers in the authority structure

new product development

Which organizational structure has been deemed "the best"? a. None b. Multidivisional c. Functional d. Simple

none

Outsourcing arrangements are a common form of what type of strategic alliance? a.Joint venture b.Equity c.Standard-cycle d.Nonequity

nonequity

The probability of disruption of the operations of multinational enterprises by political forces or events whether they occur in host countries, home country, or result from changes in the international environment describes which of the following risks associated with international strategy? a. Economic risk b. Reputational risk c. Political risk d. Financial risk

political risk

In general, ownership concentration's influence on strategies is _____, and ownership concentration's influence on firm performance is _____. a.positive; positive b.positive; negative c.negative; positive d.negative; negative

positive, positive

Outsourcing allows a firm to nurture a smaller number of capabilities, which: a.increases the potential loss in its ability to innovate. b.decreases opportunities for competitive advantage. c.decreases the loss of jobs within the firm. d.prevents the firm from becoming overextended.

prevents the firm from becoming overextended.

Product Market Stakeholders

primary customers, suppliers, host communities, unions

What are the two things that firms can share to create operational relatedness? a.Primary or support activities b.Tangible or intangible resources c.Related or unrelated diversification d.Plans or implementations

primary or support activities

__organizational cultures constantly use processes to anticipate future market needs and to satisfy them before competitors learn how to do so. a. Competitively aggressive b. Proactive c. Innovative d. Risk-averse

proactive

differentiation strategy

producing differentiated goods or services for which customers are willing to pay a price premium

cost leadership strategy

producing standardized goods or services at costs below competitors costs

Which of the following do firms in a fast-cycle market try to avoid? a.Product loyalty b.Core competencies c.Capabilities d.Imitation

product loyalty

Shareholder activists are very unhappy with a certain board of directors' recent pattern of decisions. The activists believe they need to be given more decision-making capabilities, have their voices heard, and have the opportunity to nominate another board member. What should the shareholder activists propose? a. A proxy vote b. A hostile takeover c. A coup d'état d. A dumping of shares to drop stock price and force actions by the board

proxy vote

Understanding how income is distributed within and across populations informs firms of different groups': a. social class. b. disposable income. c. purchasing power. d. family structure

purchasing power

Firms use corporate-level strategies for several reasons, including to: a. decrease revenues and profits. b. pursue development of a market. c. sell a supplier or customer. d. segment themselves into limited markets.

pursue development of a market.

A company owns a patent, with six more years of protection, on a prescription medication that is used by people around the world. This resource is: a. rare and valuable. b. nonsubstitutable and valuable. c. costly to imitate and nonsubstitutable. d. an example of outsourcing.

rare and valuable

The strategy through which a firm changes its set of businesses or its financial structure is called: a. downsizing. b. restructuring. c. an acquisition. d. a merger

restructuring

Chic Fashion is an online women's clothing store. To join Chic Fashion's e-mail list, customers must fill out a short form that includes their address, birthday, and preferred fashion style. This is an example of: a.scanning. b.monitoring. c.forecasting. d.assessing.

scanning

A firm that responds to the first mover's competitive action, typically through imitation, is called a: a. slow-cycle mover. b. late mover. c. second mover. d. last mover

second mover

With a focus strategy, a company: a. focuses on a broad, integrated group of customers. b. produces products with features that are acceptable to customers at the lowest cost. c. selects a more narrow group, or niche, of customers on which to concentrate its efforts. d. produces products that customers perceive as being different in ways that are important to them.

selects a more narrow group, or niche, of customers on which to concentrate its efforts.

China's economy exhibits traits of both _____ and _____. a.socialism; market orientation b.communism; market orientation c.consensus; competition d.centralization; decentralization

socialism, market orientation

The response of McDonald's restaurants to specific concerns for human health by using only chicken raised without antibiotics is an example of what segment of the general environment? a.Global b.Demographic c.Political/legal d.Sociocultural

sociocultural

What is a set of firms emphasizing similar strategic dimensions and using a similar strategy? a. Collusion group b. Business partners c. Strategic group d. Complementors

strategic group

Which of the following is a reason why firms with a low level of diversification are often able to earn positive returns? a. They develop capabilities that are useful across many markets. b. They can transfer knowledge across businesses. c. They are able to constantly adjust the mix in their portfolio to increase profits. d. They can provide superior customer service.

they can provide superior customer service

Lisa is the CEO of her company and has a distinct leadership style. In order to empower her employees, she delegates responsibility for many things to them, and she strengths their capabilities through continuous training. She has built a team culture in which the team and the company are more important than personal interests. What type of manager is Lisa? a. Micromanager b. Performance leader c. Transformational leader d. Laissez faire

transformational

NuTech is a company in a fast-cycle market. What type of business-level strategic alliance might it form in order to hedge against risk? a.Complementary b.Competition-reducing c.Competition response d.Uncertainty-reducing

uncertainty- reducing

_____ refers to the absence of direct links between businesses. a.Linkless b.Unrelated c.Unconstrained d.Low-level

unrelated

A firm owns several businesses, including a personal loan office and a furniture store. Another standalone personal loan office is suffering financially because of the allocation of its assets. The furniture business decides to buy the standalone personal loan business, restructure its assets, and then sell it as operations resume more successfully. This is an example of: a. unrelated diversification. b. value-neutral diversification. c. value-creating related diversification. d. vertical integration.

unrelated diversification

By pursuing an opportunity to create a marketplace through which businesses could introduce their goods and services to customers who would be able to experience them at a discounted price, Groupon made use of a _____ capability. a.rare b.costly-to-imitate c.valuable d.nonsubstitutable

valuable

n a(n) _____ cooperative strategy, firms combine some of their resources to create a competitive advantage by competing in one or more product markets. a.corporate-level b.asset-level c.business-level d.functional-level

business-level

Capabilities develop into core competencies that can serve as the source of competitive advantage when: a. a company invests a lot of financial capital into them. b. a firm copies the way other firms perform them. c. the leadership team chooses to highlight them as part of the company's core values. d. employees, or human capital, integrate them and deploy them to deliver value to customers.

employees, or human capital, integrate them and deploy them to deliver value to customers.

Your small company makes a product that your European cousins believe will be popular in their country. You have no foreign manufacturing expertise, but you can manufacture the product here in your firm's domestic facility and ship it to your cousins in Europe, whose firm will market and distribute the product for you. This is an example of: a.a greenfield venture. b.a strategic alliance. c.licensing. d.exporting.

exporting

Core competencies are often visible in the form of organizational:

functions

Core competencies are often visible in the form of organizational: a.functions. b.value. c.culture. d.symbols.

functions

all of the following are incentives for pursuing an international strategy EXCEPT: a. extending a product's life cycle. b. gaining easier access to raw materials. c. gaining access to consumers in emerging markets. d. gaining a bigger share of the national market

gaining a bigger share of the national market

Which of the following segments of the general environment includes the informal economy (defined as the part of an economy that is neither taxed nor monitored by any form of government)? a.Sociocultural b.Technological c.Economic d.Global

global

When firms are purchased in the same industry, this is known as: a.horizontal acquisition. b.vertical integration. c.networking the organization. d.unrelated diversification.

horizontal integration

A firm seeks to implement an international strategy in a location with which it is unfamiliar. The firm is unaware of the economics and cultural preferences of the location. The firm is influenced by which of the following environmental trends? a. Insensitivity to foreign culture b. Liability of foreignness c. Regionalization d. Localization

liability of foreigness

A company consists of a corporate office and operating divisions. Each operating division represents a separate business or profit center in which the top corporate officer delegates responsibilities for day-to-day operations and business-unit strategy to division managers. What type of structure does this company have? a. Multidivisional structure b. Functional structure c. Simple structure d. Complex structure

multidivisional structure

Commonly, Walgreens may be found in very close proximity to a CVS Pharmacy. Diversification of this type, where two similar businesses are simultaneously competing in the same geographic markets, is called: a.quadrant competition. b.market power. c.multipoint competition. d.multiple competition.

multipoint competition

To support the creativity needed and the continuous pursuit of new sources of differentiation and new products, jobs in a functional structure used to implement a differentiation strategy are: a.compartmentalized. b.not highly specialized. c.highly formalized. d.not highly centralized.

not highly specialized.

Agency costs do NOT include _____ costs. a.opportunity b.incentive c.monitoring d.enforcement

opportunity

A pharmaceutical company has a patented antidepressant that has few side effects and dominates the market. The company has been conducting research and development (R&D) to improve this drug for several years. The pharmaceutical company would be categorized as part of a _____ market. a. fast-cycle b. slow-cycle c. standard-cycle d. no-cycle

slow cycle

RegalWare has formed an alliance with YuVal, an Asian firm, to gain access to markets in Asia that are typically difficult to enter. RegalWare is most likely in what market type? a.Slow-cycle b.Intermediate-cycle c.Standard-cycle d.Fast-cycle

slow-cycle

A firm that is more likely to launch a competitive action, and to do it quickly, is one that has: a.low level of slack. b.small size. c.less flexibility. d.limited research and development.

small size

A CEO wants to implement a new strategy for her firm. Previously, the company's strategy was differentiation and focused on having the highest quality product. Now, instead of increasing the quality of the product, she wants to maintain quality but drive down cost per unit. What term defines this scenario? a. Strategic change b. Strategic leadership c. Organizational change d. Industry shift

strategic change

Which of these terms describes largely subjective criteria intended to verify that a firm is using appropriate strategies for the conditions in the external environment and that the company will maintain a competitive advantage? a. Organizational controls b. Corporate governance c. Financial controls d. Strategic controls

strategic controls

Mariah makes successful decisions regarding her firm's resources and their management. Mariah is a(n): a.chief executive officer (CEO). b.chief financial officer (CFO). c.informal leader. d.strategic leader.

strategic leader

All of the following are governance mechanisms that may limit managerial tendencies to over diversify EXCEPT: a.surveillance equipment and technology. b.executive compensation practices. c.the board of directors. d.the market for corporate control.

surveillance equipment and technology

In order to gain insights from which to select strategies, the firm needs to match what it _____ do with what it _____ do. a.can; cannot b.might; must not c.should; will d.can; might

can, might

A firm should outsource only activities where it: a.has the probability of developing core competencies. b.has developed the ability to innovate. c.cannot match up a value chain activity with a support function. d.cannot create value or where it is at a substantial disadvantage compared to competitors.

cannot create value or where it is at a substantial disadvantage compared to competitiors

JoAnn Tucker recently took over as Chief Executive Officer (CEO) of Burger-Rama, Inc. Burger-Rama has seen declining profits over the past five years and has struggled to remain competitive in the fast-food industry. In order to achieve strategic competitiveness, JoAnn must: a..conduct training programs and hire educated and experienced employees. b.invest in sophisticated technology in relevant knowledge areas. c.fire the current board of directors and start afresh. d.shift the company's focus to marketing and develop an extensive advertising campaign.

conduct training programs and hire educated and experienced employees

Based on what you know about the various cooperative strategies, which is the most costly to implement? a. Corporate-level cooperative strategy b. Business-level cooperative strategy c. Strategic alliance d. Network cooperative strategy

corporate level cooperative strategy

A popular TV network, QTV, wishes to gain a competitive advantage by managing several businesses from its corporate headquarters. Among its goals, QTV hopes to acquire its competitor, RTV, in the process. In this instance, QTV is using which type of strategy? a. Business-level strategy b. Network-level strategy c. Global-level strategy d. Corporate-level strategy

corporate level strategy

A _____ specifies actions a firm takes to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets. a.competitor analysis b.competitive response c.corporate-level strategy d.competitive rivalry

corporate-level strategy

The likelihood that firms will enter an industry is a function of which two factors? a.Barriers to entry and the retaliation expected from current industry participants b.Barriers to entry and the threat of substitute products c.The retaliation expected from current industry participants and neglected market segments d.Barriers to entry and switching costs

Barriers to entry and the retaliation expected from current industry participants

When virtually exclusive reliance is placed on financial controls because the board of directors is outsider-dominated, which of the following is NOT a likely result of top-level managers' actions to reach the financial goals set by the board? a.Increased diversification in the firm b.Higher levels of compensation c.Reduced investments in research and development (R&D) d.Better strategic decision making

Better strategic decision making

What is the main reason why bribery is a major issue for governments, especially countries with emerging economies? a. Bribery tends to limit entrepreneurial activity that could help a country's economy grow. b. Bribery negatively impacts the performance of firms by eating up profits. c. Bribery is impossible to monitor. d. Bribery makes firms less competitive, which negatively impacts a country's economy.

Bribery tends to limit entrepreneurial activity that could help a country's economy grow.

Which of the following is NOT an agency problem that often exists in modern corporations? a.CEOs who feel constrained by governance mechanisms are less likely to seek external advice. b.The principal and the agent have different interests and goals. c.Shareholders lack direct control of large publicly traded corporations. d.An agent makes decisions that results in pursuing goals that conflict with those of the principals

CEOs who feel constrained by governance mechanisms are less likely to seek external advice.

Which of the following is NOT an agency problem that often exists in modern corporations? a.CEOs who feel constrained by governance mechanisms are less likely to seek external advice. b.The principal and the agent have different interests and goals. c.Shareholders lack direct control of large publicly traded corporations. d.An agent makes decisions that results in pursuing goals that conflict with those of the principals.

CEOs who feel constrained by governance mechanisms are less likely to seek external advice.

Car maker BAAS is known for its risky competitive behavior, including drastically changing its prices over short time spans. Based on this information, which of the following is the most likely competitor response? a. Competitors will be more likely to respond because of BAAS' risky behavior. b. Competitors will be less likely to respond because of BAAS' risky behavior. c. Competitors will be more likely to respond because of BAAS' stability in the market. d. Competitors will be less likely to respond because of BAAS' stability in the market.

Competitors will be less likely to respond because of BAAS' risky behavior.

Which of the following represents a risk for companies pursuing a differentiation strategy? a. Competitors' imitation of a product at a lower price causing customers to purchase their product b. Failing to meet customers' minimal level of acceptable service c. Competitors' imitation of the value chain activities that make up the company's strategy d. Competitors' innovations resulting in their ability to drive costs lower

Competitors' imitation of a product at a lower price causing customers to purchase their product

Which of the following is an advantage of being part of a slow-cycle market as opposed to a fast-cycle market? a. In slow-cycle markets, firms must innovate rapidly in order to stay competitive. b. In slow-cycle markets, firms can shield themselves from imitation. c. In slow-cycle markets, firms can innovate at a slower pace, although it's often expensive. d. In slow-cycle markets, firms can innovate at a faster pace, and it's often inexpensive.

In slow-cycle markets, firms can shield themselves from imitation

Which of the following is associated with a more heterogeneous top management team? a.A less diverse team membership b.Less innovative team decisions c.A more cohesive team d.More difficulty in the implementation of strategies

More difficulty in the implementation of strategies

Which of the following is a typical risk for a firm that uses the cost leadership strategy? a.Excessive differentiation causing the customer base to become too small b.Loss of customer loyalty c.Production and distribution processes becoming obsolete d.Inability to balance high differentiation with low price

Production and distribution processes becoming obsolete

Which of the following statements about the German two-tiered board structure is true? a. Proponents of the German structure suggest that it helps prevent corporate wrongdoing and rash decisions by "dictatorial CEOs." b. The corporate governance practices in Germany make it easier to restructure companies more quickly. c. All German firms are required to have a two-tiered board structure. d. Critics of the German structure maintain it allows inside managers to dominate a firm's board of directors.

Proponents of the German structure suggest that it helps prevent corporate wrongdoing and rash decisions by "dictatorial CEOs."

Quality Construction Supply is a building materials provider headquartered in eastern Canada. The firm's leadership team has recognized that intense rivalry in the region is having a negative impact on the firm's growth and profitability. What is the primary reason behind the firm's decision to acquire a similar building materials supplier serving the northeastern United States? a.Acquiring another firm serving a different market will allow Quality Construction Supply to overcome barriers to entry in another country. b.Reducing the firm's dependence on the eastern Canadian market will reshape the firm's competitive scope. c.Acquiring another firm serving a different market will give Quality Construction Supply access to capabilities it lacks. d.Reducing the firm's dependence on the eastern Canadian market will help avoid a hostile takeover.

Reducing the firm's dependence on the eastern Canadian market will reshape the firm's competitive scope

Which of the following statements regarding the market for corporate control is true? a.Activist pension funds identify firms whose performance could be improved and then invest in them. b.For top-level managers, board acceptance of the acquiring firm's offer usually leads to job loss because the acquiring firm wants new leadership; if the offer is refused, however, the job loss risk is minimal. c.Research shows that most institutional investors support the use of hostile takeover defense strategies. d.Research suggests that the market for corporate control is an imperfect governance mechanism due to the fact that investors sometimes use the market for corporate control to take an ownership position in firms that are performing well.

Research suggests that the market for corporate control is an imperfect governance mechanism due to the fact that investors sometimes use the market for corporate control to take an ownership position in firms that are performing well.

Which of the following statements about focus strategies is true? a.They are subject to more failure than industry-wide strategies. b.They can avoid global risk by focusing on pointed national or regional markets. c.They are protected from risks associated with industry-wide strategies due to a position focus. d.They are faced with more risks than are industry-wide strategies.

They are faced with more risks than are industry-wide strategies.

Kevin is on the board of directors of a local company and has become concerned with a situation that came to his attention. The board is considering electing the current CEO as chair of the board. Does Kevin have a reason for concern? a. Yes, if Kevin knows the CEO and doesn't like his or her personality. b. Yes, as the CEO will not be able to be forced out if his or her performance becomes unacceptable. c. No, because the board will be sure to elect the best individual to the chair position, regardless of current title. d. No, because a single individual as CEO and chair of the board has proven to be very successful in the past.

Yes, as the CEO will not be able to be forced out if his or her performance becomes unacceptable.

Value is measured by: a. a product's performance characteristics and by its attributes for which customers are willing to pay. b. the price of a product or service set by the manufacturer to be sold in a retail environment. c. the inputs required to produce a product or service, including human, physical, and financial capital. d. the amount of investment required to achieve a competitive advantage.

a product's performance characteristics and by its attributes for which customers are willing to pay.

Which of the following firms is more likely to take competitive action? a. A large firm b. A medium-sized firm c. A small firm d. Size is not a good predictor of the likelihood a firm will take competitive action.

a small firm

A company has identified a core competency in providing telecommunications services for mid-sized businesses through a combination of simple technology and software, excellent customer service, and low-cost hardware. As competitors gain ground in competing for mid-sized companies, this core competency might become a core rigidity if the: a. company starts to target smaller businesses with its bundle of capabilities. b. company chooses to shift its focus to large-scale enterprises to offer its products and services. c. company doesn't keep up with advances in technology and customers begin to expect greater value from the technology. d. cost of hardware rises, thereby increasing the company's costs of production.

company doesn't keep up with advances in technology and customers begin to expect greater value from the technology.

Which M-form structure is characterized by complete independence among the firm's divisions that compete for corporate resources? a.Cooperative b.Competitive c.Cost leadership d.Strategic business unit (SBU)

competitive

One constant improvement among smartphones of all brands is camera quality. As soon as Samsung, Google, or Apple introduces an updated phone, the others respond with equal or better quality in their next update. These competitive moves can be encompassed as the _____ of that market. a. market commonality b. competitor analysis c. resource similarity d. competitive dynamics

competitive dynamics

Any action that a firm takes to counter the effects of a rival's action against it is a: a.competitive action. b.competitive response. c.strategic action. d.tactical action.

competitive response

General Electric (GE), the multinational conglomerate, is researching rivals in the appliance industry by analyzing the financials, current product offerings, and strategies of competitors in order to gain insight as to how to gain a competitive advantage. Which of the following is GE performing? a. Competitor analysis b. Industry analysis c. External environmental analysis d. General analysis

competitor analysis

_____ is the set of data and information the firm gathers to better understand and anticipate competitors' objectives, strategies, assumptions, and capabilities. a.Rules of engagement b.Competitor intelligence c.A SWOT analysis d.Complementor analysis

competitor intelligence

Firms operating in the same market, offering similar products, and targeting similar customers are: a. allies. b. competitors. c. multimarket competitors. d. market commonality

competitors

What type of strategic alliance do firms often use to take advantage of joint long-term product development and distribution opportunities? a.Uncertainty-reducing b.Competition-reducing c.Complementary d.Competition-response

complementary

Of the four business-level cooperative strategies, which one has the greatest possibility of creating a sustainable competitive advantage? a.Competition response strategy b.Uncertainty-reducing strategy c.Competition-reducing strategy d.Complementary strategic alliances

complementary strategic alliances

Organizational culture is the: a. complex set of ideologies, symbols, and core values that individuals throughout the firm share and that influence how the firm conducts business. b. structure of a company's organizational chart of strategic leaders, including their roles and responsibilities. c. attitude of a company's owners or shareholders. d. policies and procedures detailed in the company's employee handbook

complex set of ideologies, symbols, and core values that individuals throughout the firm share and that influence how the firm conducts business.

Which of the conditions that characterizes difficult managerial decisions concerning resources, capabilities, and core competencies results from the interrelationships among conditions shaping a firm? a.Complexity b.Uncertainty c.Intraorganizational conflict d.Judgment

complexity

Large businesses that are not related to each other and make no efforts to share activities or to transfer core competencies between or among them are typically known as: a.portfolio firms. b.conglomerates. c.concentrated firms. d.unique core competency firms

conglomerates

JumpStart Company and Rewind Inc. have entered into a cooperative strategy. Their legal teams have crafted lengthy and specific contracts to detail each aspect of the alliance, including the responsibilities of each partner, accounting procedures, and technical aspects. JumpStart and Rewind are using the _____ approach to manage their cooperative strategy. a.cost-minimization b.risk reduction c.explicit collusion d.opportunity-maximization

cost-minization

Vendors across the country offer sunglasses that look virtually identical to those made by Chanel, Prada, Gucci, and other luxury brands—including the trademark logos—but cost far less. These products are the result of: a.competition. b.imitation. c.counterfeiting. d.evolving consumer preferences.

counterfeiting

Hocus Pocus Smoked Ribs has only one location and wants to exploit its competitive advantage, a very popular recipe for smoked meats. This means that it wants to: a.form multiple business-level strategies. b.create a single business-level strategy. c.implement a cooperative strategy. d.establish a global strategy.

create a single business-level strategy.

Through research and development (R&D), a cable company has found a way to use its existing network lines to serve customers with a new product offering—home security systems. The company is offering the service with a lower monthly fee than most other security companies. However, the sales force didn't see a lot of interest among its customers who had an existing security system from a competitor until the firm ran a promotion for reduced prices on equipment and free installation. Which of the competitive forces is at play? a. Cost conditions b. Bargaining power of suppliers c. Customer switching costs d. Complementors

customer switching costs

A company has a tool to monitor its progress. This tool analyzes the company's finances and its strategy. The executives use this tool to understand how the firm responds to shareholders, how customers view the firm, what processes to focus on to successfully use its competitive advantage, and how it can use innovation to improve its performance. What is this a description of? a. Balanced scorecard b. Control dashboard c. Business analytics d. Corporate monitoring

balance scorecard

Managing the business units of a geographically diverse multinational firm requires skill, not only in managing a _____ set of businesses, but also coordinating _____ points of view emerging from businesses located in countries and regions. a.decentralized; diverse b.centralized; diverse c.centralized; analogous d.decentralized; analogous

decentralized, diverse

Michael is the CEO of a manufacturer with plants in three countries. He currently has a product line that is manufactured only in the company's U.S. plant. That product has experienced a steady increase in its export sales to Europe over the last three years. The international sales director is recommending that the company expand manufacturing capabilities at the European plant to include this product line. Michael and his management team must consider whether to pursue this strategy. This is: a. a decision driven by the industrial organization (I/O) model of above-average returns. b. a conflict between two of the company's stakeholder groups. c. the diffusion of technology and perpetual innovation to help the company achieve its goals. d. a decision that would benefit from using the entire strategic management process.

decision that would benefit from using the entire strategic management process.

Which of the following involves specifying the vision and the strategy to achieve the vision? a. Determining strategic direction b. Corporate governance c. Strategic planning d. Vision planning

determining stratgic direction

An automotive company has entered into a strategic alliance with a motor manufacturer. The automotive company is depending on the motor manufacturer's expertise and experience in developing high horsepower motors for small sports cars. The automotive company holds a 60 percent stake in the partnership, and the motor manufacturer holds 40 percent. The strategic alliance between the two firms is best described as a(n): a. cooperative strategy. b. joint venture. c. equity strategic alliance. d. nonequity strategic alliance

equity strategic alliance

A company in a slow-cycle market would most likely use a strategic alliance in order to: a.establish a franchise in a new market. b.form an industry technology standard. c.maintain market leadership. d.learn new business techniques.

establish a franchise in a new market.

Apple and IBM compete in an industry that has frequent product innovations. They collaborate with each other, as well as with a host of other firms, to achieve their objectives. These arrangements are most likely: a.dynamic alliance networks. b.horizontal alliance networks. c.stable alliance networks. d.vertical alliance networks.

dynamic alliance networks.

Powerful customers can force a cost leader to reduce its prices, but not below the level at which the cost leader's: a.next-most-efficient industry competitor can earn average returns. b.least efficient industry competitor can earn average returns. c.next-most-efficient industry competitor can earn above-average returns. d.next-most-efficient industry competitor can earn below-average returns.

next-most-efficient industry competitor can earn average returns.

All of the following are analyzed during a SWOT analysis EXCEPT: a. weaknesses. b. threats. c. strengths. d. objectives.

objectives

Which of the following is NOT one of the three levels in the strategic business unit (SBU) M-form? a.Corporate headquarters b.Strategic business units c.Operations management d.SBU divisions

operations management

A car manufacturer and its partner in a cooperative strategic alliance have very minimal contract terms. Both firms are hoping to learn from each other to develop new, value-creating, innovative products. By implementing very few contractual terms in their alliance, the two firms are managing their cooperative strategy using which approach? a. Cost maximization b. Cost minimization c. Opportunity maximization d. Opportunity minimization

opportunity maximization

A company's strategy is misguided due to poor reporting on how to enhance performance and maintain a competitive edge. Which aspect of structure is this company missing? a. Corporate governance b. Structural flexibility c. Organizational controls d. Simple structure

organizational controls

The Dodd-Frank Wall Street Reform and Consumer Protection Act does all of the following EXCEPT: a.provides a new framework to regulate derivatives. b.establishes new corporate governance requirements. c.prescribes significant transparency improvement on internal control associated with accounting and auditing. d.regulates credit rating agencies and securitizations

prescribes significant transparency improvement on internal control associated with accounting and auditing.

A vision statement differs from a mission statement in that the vision statement: a. should be completed before a company analyzes its external environment and internal organization. b. is realistic, achievable, and measurable. c. speaks in broad terms of what the company wants to achieve. d. specifies the businesses in which the firm intends to compete and the customers it intends to serve.

speaks in broad terms of what the company wants to achieve.

In the changing competitive landscape, new competitors are arriving on the scene that are threatening the continued success of Boomerang Company. Boomerang is now seeking to form strategic alliances to counter those competitive challenges. Boomerang is most likely in what market type? a.Slow-cycle b.Standard-cycle c.Moderate-cycle d.Fast-cycle

standard-cycle

Which of the following is NOT a form of executive compensation? a. Salaries b. Stock performance c. Stock options d. Stock awards

stock performance

Over the past three years, Simcom's board of directors has become increasingly concerned about the top-level managers' reliance on external acquisitions, as opposed to internal product innovations. They are discussing the possibility of replacing the CEO. Their decision to exercise corporate governance is primarily motivated by concerns over a. the market for corporate control. b. ownership concentration. c. executive compensation. d. strategic direction

strategic direction

_____ is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary. a. Strategic power b. Strategic leadership c. Influence d. Teamwork

strategic leadership

What is likely the most prominent function in headquarters for an SBU M-form structure? a.Corporate R&D b.Corporate finance c.Strategic planning d.Corporate human resources

strategic planning

If a U.S.-based automobile parts supplier were to apply a global mind-set to its internal analysis, it would: a. review sales data of its North American dealerships to determine its most popular vehicles. b. research the history of the invention of the car and the evolution of the automobile industry. c. find information about the transportation infrastructure in emerging automobile markets around the world, including Asia and Africa. d. study all of its internal resources with an understanding of which capabilities offer value to meet the needs of U.S., Japanese, European, and Korean automakers.

study all of its internal resources with an understanding of which capabilities offer value to meet the needs of U.S., Japanese, European, and Korean automakers.

An international diversification strategy creates the potential for firms to do all of the following EXCEPT: a. sustain a competitive advantage without the need to continually upgrade it. b. generate the resources required to sustain a large-scale research and development (R&D) operation. c. achieve greater return on their innovations. d. reduce the often-substantial risks of R&D investments.

sustain a competitive advantage without the need to continually upgrade it.

A _____ competitive advantage exists only when competitors are unable to duplicate the benefits of a firm's strategy or when they lack the resources to attempt imitation. a.profitable b.temporary c.rare d.sustainable

sustainable

WheelsUp is a popular bicycle brand in the western United States, while GoTrek is a best-seller in the Midwest. The two companies formed a _____ in which they created economies of scope by sharing resources to build bicycles that can carry either brand name, depending upon the region in which it is sold. a.diversifying strategic alliance b.synergistic strategic alliance c.franchise d.complementary strategic alliance

synergistic strategic alliance

Which of the following is NOT a reason why firms initiate competitive actions and responses in standard-cycle markets? a.To seek large market shares b.To gain customer loyalty through brand names c.To control the firm's operations carefully d.To sustain a competitive advantage over longer periods

to sustain a competitive advantage over longer periods

In which structure for implementing a multidomestic strategy is the emphasis on differentiation by local demand to fit an area or country culture? a.Worldwide geographic area b.Worldwide product c.International network d.International functional

worldwide geographic area

Which of the following scenarios represents a company that has selected a differentiation strategy? a. A grocery store chain is converting its local neighborhood stores to warehouses. The chain eliminates shopping in the aisles and instead has customers select items online or through an app. The customers can then pick up their items in a drive-through without having to leave their vehicles. b. A company is developing a tablet device that sells features, such as speed and memory, as add-ons to produce a base model of its device that is below the typical market cost. c. A tool manufacturer is investing in research and development (R&D) to develop modifications to existing tools so that they can be used more effectively and safely in the oil and gas industry. d. A restaurant entrepreneur announces a new fast-food chain where every item on the menu is just $1.

A grocery store chain is converting its local neighborhood stores to warehouses. The chain eliminates shopping in the aisles and instead has customers select items online or through an app. The customers can then pick up their items in a drive-through without having to leave their vehicles.

In cases where intellectual property rights in the emerging economy are not well protected, the number of firms in the industry is growing fast, and the need for global integration is high, which of the following entry modes are preferred? a.A joint venture or a wholly owned subsidiary b.A strategic alliance or exporting c.Licensing or acquisition d.Importing or licensing

A joint venture or a wholly owned subsidiary

Which of the following might be an alternative definition of business-level strategy? a. A picture of what the firm wants to be in broad terms and what it hopes to achieve b. A plan for how the company will compete in its industry against its rivals to achieve a competitive advantage c. The inputs into a firm's production process, including physical, human, and organizational capital d. The source of competitive advantage for a firm to deliver above-average returns

A plan for how the company will compete in its industry against its rivals to achieve a competitive advantage

Which of the following describes a company that has delivered above-average returns to its investors? a. A biotech firm that recently announced it has received FDA approval for its new orphan drug to treat a rare heart condition and will be able to sell the treatment for $10,000 per year per patient beginning in the fall b. A tool manufacturer that announced it will increase its dividend payment—the highest dividend amongst all of its industry competitors—for the upcoming quarter due to market share gains in overseas markets c. A retail company that announced it saw growth in same-store sales from last year to this year and will open 250 new stores to capitalize on its growing popularity d. An airline that reported weaker-than-projected earnings this year because of increased maintenance costs for its aging fleet of planes

A tool manufacturer that announced it will increase its dividend payment—the highest dividend amongst all of its industry competitors—for the upcoming quarter due to market share gains in overseas markets

A jewelry firm has recently acquired its gem supplier. The jewelry firm prides itself on always being the first to predict and serve new trends. For example, the firm was one of the first to introduce rose gold jewelry pieces after research predicted a large demand. Which of the following attributes of the firm helps it to maintain a long-term competitive advantage in markets? a. Merged firm maintains a low to moderate debt position b. Acquisition is friendly c. Acquiring firm has financial slack d. Acquiring firm has a sustained and consistent emphasis on research and development (R&D) and innovation

Acquiring firm has a sustained and consistent emphasis on research and development (R&D) and innovation

What is one of the risks in using acquisitions as a means of product development and innovation? a.Firms eventually lose their ability to estimate the outcome of internal product development. b.Firms eventually lose their ability to specify how the acquisitions can be integrated into their operations. c.Acquisitions may become too much of a substitute for true internal innovation. d.Research has shown that using acquisitions as a means of product development and innovation typically results in decreased sales and lower performance.

Acquisitions may become too much of a substitute for true internal innovation.

Which of the following would be deemed unethical when developing competitor intelligence? a. Analyzing competitors' financial reports b. Attending trade shows solely to obtain knowledge of competitors' new products c. Obtaining court records in an attempt to find statements that may not be found anywhere else d. All of these actions are ethical

All of these actions are ethical.

Which of the following companies simultaneously creates economies of scope through both operational and corporate relatedness? a.Procter & Gamble b.Amazon c.Virgin Group d.Honda

Amazon

Which of the following statements about a flexible manufacturing system (FMS) is NOT true? a..Used properly, an FMS allows the firm to increase its effectiveness in responding to changes in its customers' needs, while retaining low-cost advantages and consistent product quality. b.An FMS is a computer-controlled process that allows firms to produce a variety of products in moderate, flexible quantities with a minimum of manual intervention. c.The goal of an FMS is to eliminate the "low cost versus product variety" trade-off that is inherent in traditional manufacturing technologies. d.An FMS allows a manufacturer to connect with its suppliers, distributors, and customers, which enables it to satisfy customer expectations in terms of product quality and delivery speed.

An FMS allows a manufacturer to connect with its suppliers, distributors, and customers, which enables it to satisfy customer expectations in terms of product quality and delivery speed.

What is a competitor analysis? a. An analysis of companies with which a firm competes directly b. A robust analysis of one specific competitor c. An internal report of what a competitor may discover if the competitor analyzed the company d. A SWOT analysis of a competito

An analysis of companies with which a firm competes directly

A software firm has chosen to implement a differentiation strategy, offering its product in a Software as a Service (SaaS) platform with a monthly subscription. Most of the firm's competitors are selling their products as a one-time purchase. Which of the following represents the greatest risk to the strategy? a. There's a shortage of technical workers to maintain the software platform, causing human resources to increase wages to attract quality employees. b. An established competitor has announced it will begin offering its programs in a SaaS model next quarter. c. As the number of users increases, the company will need to invest resources to scale the SaaS platform. d. The biggest competitor in this software market is slashing its prices to below the company's annual rate

An established competitor has announced it will begin offering its programs in a SaaS model next quarter.

Which of the following represents an example of an external incentive for value-neutral diversification? a. A company that is operating inefficiently and has an uncertain forecast b. A firm that has opportunities to transfer its capabilities to another profitable business area and spread its investment risk c. A company that has a predictable and steady revenue stream and is meeting its customers' needs efficiently d. An organization forced to pursue a new business unit because of changes in tax laws and regulations

An organization forced to pursue a new business unit because of changes in tax laws and regulations

Michelle opens a residential heating company dedicated to geothermal heating systems. She is pursuing a focused differentiation strategy, serving the needs of customers who are looking for environmentally friendly solutions to heat and cool their homes. Which of the following represents a risk to the company because Michelle is using a focus strategy rather than a broad strategy? a. Competitor residential heating and cooling companies offer mainstream options at lower prices. b. The cost of geothermal technology comes down and becomes more aligned with mainstream options, increasing the number of customers who consider geothermal options. c. New technology in the solar energy business is developed that makes efficient heating and cooling solutions based on power available to customers. d. As renewable energy continues to gain popularity, mainstream residential heating and cooling companies that are larger and have more resources decide to offer more geothermal options.

As renewable energy continues to gain popularity, mainstream residential heating and cooling companies that are larger and have more resources decide to offer more geothermal options.

Which of the following is a risk of a focus strategy? a.Industry-wide competitors use their resources to serve a wider range of customers' needs than the focuser has been serving. b.Focused competitors use their resources to serve a wider range of customer needs. c.Core competencies of a competitor attract a more broadly defined segment. d.Core competencies of a competitor are used to focus on an even more narrowly defined segment, thereby skimming off the most desired customers.

Core competencies of a competitor are used to focus on an even more narrowly defined segment, thereby skimming off the most desired customers.

The senior managers of a grocery store chain have a disagreement over the direction of the company. One faction wants to leverage its capabilities and core competencies to take advantage of the opportunities provided by a stronger online presence, including online ordering with both at-store pickup and home delivery. The other faction feels that the company's strengths lie in small, convenient neighborhood stores and the customer service that accompany an in-store shopping experience. The online expansion would be a departure from what the company already knows how to do and would require a significant investment. Those in favor of the changes feel that the potential returns make the investment worthwhile. What concept are those in favor of change struggling against? a. A global mind-set b. Tangible resources c. Core capabilities d. Core rigidity

Core rigidity

What are economies of scope? a. Complex sets of resources and capabilities that link different businesses, primarily through managerial and technological knowledge, experience, and expertise b. Cost savings a firm creates by successfully sharing resources and capabilities or transferring one or more corporate-level core competencies that were developed in one of its businesses to another of its businesses. c. The abilities of a firm to sell its products above the existing competitive level or to reduce the costs below the competitive level of its primary and support activities d. The advantages achieved when a company produces its own inputs or owns its own source of output distribution.

Cost savings a firm creates by successfully sharing resources and capabilities or transferring one or more corporate-level core competencies that were developed in one of its businesses to another of its businesses.

Myspace, the social networking site, was a leader and innovator for modern social networking. However, not long after Myspace's peak, a new social networking site, Facebook, began gaining ground. Myspace quickly became obsolete because of Facebook's superior functionality, design, and features. Which of the following was Myspace lacking that resulted in the company losing its competitive advantage? a. A mission statement because the company lacked a clear understanding of where it was operating and who it was serving b. Valuable capabilities because Myspace didn't exploit the opportunity of people's need to connect c. Costly-to-imitate capabilities because it became less expensive to start a social networking site d. Intangible resources

Costly-to-imitate capabilities because it became less expensive to start a social networking site

A technology firm has had some issues in its decision making. The company is the leader in innovation and is always ahead of the curve on technological advances. But the business struggles with operations and marketing decisions. The leadership team is the same group of five people that started in a garage after meeting in a computer science class. What would you suggest to this company? a. Create a more homogeneous top management team. b. Create a more heterogeneous top management team. c. Leave all decision making to a single leader. d. Continue operations as is

Create a more heterogeneous top management team.

Gina is a transformative leader. She wants as much input from others as possible and has developed a top management team. The team is composed of the brightest minds with highly diverse backgrounds. However, the team sometimes has trouble cohesively implementing strategies and making decisions in a timely manner. As a result, the company is losing its competitive advantages. What does Gina need to change? a. Create a homogeneous top management team. b. Cut the number on her top management team. c. Apply hard deadlines to decisions. d. Realign strategy.

Cut the number on her top management team.

Dan Jones, the owner of Harbor Home Remodeling, has been researching demographic information on homeowners in his area. He has learned that younger people are moving out of the region—a trend that's expected to continue—while middle-aged and older people are remaining in their homes. In order to differentiate his firm and better compete against rival, general remodeling firms in this environment, which strategy would best enable Dan to fulfill his purpose? a. Dan should "perform activities differently" and pursue a cost leadership strategy. By using less expensive materials and cheaper labor, he could reduce the cost of his remodeling services. b. Dan should "perform activities differently" and pursue a focused differentiation strategy. He could specialize in remodeling homes to meet the unique needs of aging people, such as installing wheelchair ramps and low-threshold showers. c. Dan should "perform different activities" and transition into building new, custom homes for the segment of the market that interests him—retirees and the elderly. d. Dan should "perform activities differently" and pursue a differentiation strategy. In addition to his remodeling services, he could offer other home repair services, such as plumbing and electrical repair.

Dan should "perform activities differently" and pursue a focused differentiation strategy. He could specialize in remodeling homes to meet the unique needs of aging people, such as installing wheelchair ramps and low-threshold showers.

Which of the following is an example of an operations activity? a. Developing employees' work schedules b. Arranging for customers' payments for delivered goods c. Developing and managing product brands d. Fully complying with a product's warranty

Developing employees' work schedules

When examining the Assumptions component for a competitor analysis, which of the following is a question that is addressed? a.Do we assume the future will be volatile? b.How are we currently competing? c.How do we rate compared to our competitors? d.What are our strengths and weaknesses?

Do we assume the future will be volatile?

Which of the following statements about the effectiveness of boards of directors is NOT true? a.Research suggests that diverse boards help firms make more effective strategic decisions and perform better over time. b.One of the changes to enhance the effectiveness of the board of directors is the creation of a "lead director" role that has strong powers with regard to the board agenda and oversight of non-management board member activities. c.Evidence suggests that boards have been highly effective in monitoring and controlling top-level managers' decisions and subsequent actions. d.The performances of individual board members and entire boards are being evaluated more formally and with greater intensity than in years past.

Evidence suggests that boards have been highly effective in monitoring and controlling top-level managers' decisions and subsequent actions.

Which of the following statements regarding the allocation of capital is true? a.External investors receive full information regarding current performance and future prospects of a business. b.Businesses seeking capital are not required to provide information to potential suppliers. c.External sources of capital have a limited ability to understand the operational dynamics within large organizations d.External shareholders have access to information and therefore receive full and complete disclosure.

External sources of capital have a limited ability to understand the operational dynamics within large organizations

Germany is known for its excellent technical training system, which has a strong emphasis on continuous product and process improvements. If Germany did not have such a system, it would lack which of the following determinants of national advantage? a. Firm strategy, structure, and rivalry b. Demand conditions c. Related and supporting industries d. Nature and size of domestic market

Firm strategy, structure, and rivalry

What are the advantages of choosing a vertical complementary strategic alliance versus a horizontal complementary strategic alliance? a. Firms can partner to share resources for separate parts of the value chain, which helps them if they are pursuing projects in which they do not have previous experience in specific stages of the value chain. b. Firms can partner to share resources for the same parts of the value chain, which helps them if they are pursuing projects in which they do not have previous experience in specific stages of the value chain. c. Firms can prevent their partners from having access to their most valuable resources, which helps the firms prevent opportunistic behavior by their partners. d. A firm can give its partner access to its most valuable resources, which enables both partners to maximize its success.

Firms can partner to share resources for separate parts of the value chain, which helps them if they are pursuing projects in which they do not have previous experience in specific stages of the value chain.

Which of the following best explains the underlying premise of the balanced scorecard? a. Firms jeopardize their future performance when they emphasize financial controls at the expense of strategic controls. b. Managers tend to make self-serving decisions when they focus on the long term. c. Focusing on long-term goals rather than short-term goals generally leads to higher performance. d. Financial control encourages lower-level managers to make decisions that incorporate moderate and acceptable levels of risk

Firms jeopardize their future performance when they emphasize financial controls at the expense of strategic controls.

If firms did not participate in cross-border strategic alliances, what might happen for firms expanding internationally? a. Firms would be more successful in entering foreign markets because they would be minimally influenced by other firms. b. Firms would be more successful in their domestic markets because they would not be as concerned with establishing themselves in a foreign market. c. There would be no measurable impact if firms did not implement cross-border strategic alliances. d. Firms would struggle to implement international strategies without the ability to use the resources and expertise of local firms in the foreign markets they were trying to enter

Firms would struggle to implement international strategies without the ability to use the resources and expertise of local firms in the foreign markets they were trying to enter.

A CEO has just resigned and quickly vacated his role for a more lucrative opportunity. The company, with the rapid change, is in limbo and needs leadership. What is the board of directors' next logical action? a. Cautiously hiring a CEO b. Rapidly hiring a CEO c. Hiring an external interim CEO d. Hiring an internal interim CEO

Hiring an internal interim CEO

Not all CEO changes are successful. Which one of the following scenarios has the greatest chance of failure? a. Hiring an external CEO b. Hiring an international external CEO c. Hiring an international internal CEO d. Hiring an internal CEO

Hiring an international external CEO

Risks associated with cooperative strategies include a partner's failure to present its resources to the other, as well as one firm acting opportunistically towards the other with the use of the partner's resources. How can these two risks be a result of each other? a. If a firm acts fairly towards its partner, the partner might misrepresent its resources in order to keep the firm from gaining any more access. b. If one firm feels that the other will act opportunistically, it might withhold its promised resources to keep the partner from gaining access to proprietary information. c. If one firm presents its resources first, the other will not present its resources to compete against the partner. d. When one firm doesn't present its resources, it is likely that it is going to try to act opportunistically towards its partner.

If one firm feels that the other will act opportunistically, it might withhold its promised resources to keep the partner from gaining access to proprietary information.

A company is debating whether to enter a new industry. The first order of business is to conduct an analysis of the five forces. Why is this a crucial first step in the decision-making process of entering a new industry? a. If the barrier for entry is low, and suppliers and buyers have strong bargaining positions, the venture will most likely fail. b. If the barrier for entry is high, and suppliers and buyers have little bargaining power, the venture will most likely fail. c. If the barrier for entry is low, and suppliers and buyers have strong bargaining positions, the venture will most likely succeed. d. If the barrier for entry is high, and suppliers and buyers have strong bargaining positions, the venture will most likely succeed.

If the barrier for entry is low, and suppliers and buyers have strong bargaining positions, the venture will most likely fail.

A large software company is in the process of acquiring a small tech startup that has built an app for developers to code websites on their smartphones. It is rumored that the software company has grossly overestimated the future growth as a result of the acquisition. If this turns out to be true, what common acquisition problem has the software company encountered? a. Integration difficulties b. Inability to achieve synergy c. Too much diversification d. Inadequate evaluation of target

Inadequate evaluation of target

Which of the following would be a motive for top-level executives to diversify their firm beyond value-creating and value-neutral levels? a. Decreased compensation and reduction of managerial risk b. Pursuit of a managerial challenge c. Interest in a promotion to a board position d. Increased compensation and reduced managerial risk

Increased compensation and reduced managerial risk

What are the three basic benefits that firms can enjoy by successfully using international strategies? a. Increased market size, increased economies of scale and learning, and development of a competitive advantage through location b. Decreased market size, decreased economies of scale and learning, and development of a competitive disadvantage through location c. Increased market size, decreased economies of scale and learning, and development of a competitive advantage through location d. Decreased market size, increased economies of scale and learning, and development of a competitive disadvantage through location

Increased market size, increased economies of scale and learning, and development of a competitive advantage through location

Acer, the electronics company, is always behind the technological curve. When products are ready to hit the market, the trend has already passed and it continues to lose market share. What change to its organizational structure might you recommend to counteract this trend? a. Decreasing structural flexibility b. Decreasing structural stability c. Increasing structural stability d. Increasing structural flexibility

Increasing structural flexibility

Which of the following describes the relationship between Intel, which makes computer processors, and Microsoft, a leading desktop software company? a. Intel and Microsoft are complementors. b. Intel and Microsoft are competitors. c. Intel is a supplier to Microsoft. d. Intel is a customer of Microsoft.

Intel and Microsoft are complementors.

Apple, a leader in mobile technology products, wasn't always focused on mobile technology. In 2007, the company changed its name from Apple Computers to Apple Inc. This change was indicative of a shift in the industry. Apple began introducing iPods, iPhones, iPads, iTunes, and the App Store. Apple recognized its core competencies in hardware design and software engineering should serve as the foundation of its future strategy. Which of the following tools did Apple use to determine its competitive advantage? a. External environmental analysis b. Competitor analysis c. Industry analysis d. Internal analysis

Internal analysis

What are some of the largest factors for a firm when it demands continuous product innovation? a. Interpreting and taking action on often ambiguous information b. Disposable income c. Cost leadership programs d. Board of Directors

Interpreting and taking action on often ambiguous information

What are the benefits of having strong corporate governance? a. Because managers and employees fear for their jobs, it allows fear to improve productivity. b. It shifts accountability and responsibility for developing an ethical organizational culture and making sure the firm performs effectively from top-level managers to the board of directors. c. It encourages top-level managers to be strategically competitive. d. There are no benefits to corporate governance, which is seen as an unneeded expense.

It encourages top-level managers to be strategically competitive.

Which of the following statements about a firm's resources and capabilities is true? a.All of a firm's resources and capabilities have the potential to be the foundation for a competitive advantage. b.It is difficult to achieve and sustain a competitive advantage based on resources alone. c.As a source of competitive advantage, a capability must be exceedingly complex to understand and manage. d.When a resource is rare and valuable, it becomes a core competency.

It is difficult to achieve and sustain a competitive advantage based on resources alone

If IKEA chose to implement a multidomestic strategy in which it practiced global efficiency and local responsiveness instead of its current successful global strategy, which of the following would be the most likely outcome? a. It would sacrifice the efficiency of centralized operations and distribution, which could affect its cost position, potentially driving up costs and prices. b. It would need less time to open stores in other countries based on speedy research of prime locations. c. Its products would stay the same, with the quirky Swedish selection IKEA currently offers. d. Its products would be even harder for customers to build themselves upon purchase.

It would sacrifice the efficiency of centralized operations and distribution, which could affect its cost position, potentially driving up costs and prices.

Companies must be aware of technological advances within their industry and make strategic management decisions that take into account perpetual innovation and disruptive technologies. Which of the following is an example of a company that did not respond strategically to technological changes? a. After Google introduced the concept of pay-per-click advertising, a competing search engine, Bing, introduced a similar advertising model. b. Samsung, LG, and other cell phone manufacturers continued to innovate their products after the introduction of the Apple iPhone to keep up with customer expectations of smartphones. c. Kodak revolutionized the automatic snapshot camera more than 100 years ago, making photography accessible to everyone. When innovators brought digital cameras to the marketplace, Kodak focused on making it easy for people to print their photos using this technology. d. Amazon decided to enter into the online streaming video market with Amazon Prime Video to compete directly with Netflix.

Kodak revolutionized the automatic snapshot camera more than 100 years ago, making photography accessible to everyone. When innovators brought digital cameras to the marketplace, Kodak focused on making it easy for people to print their photos using this technology.

Wallingford Company is trying to determine optimal ways to collect and distribute knowledge throughout the firm. This is an activity for which support function in the value chain? a.Human resources b.Finance c.Management information systems d.Distribution

Management Information Systems

What are the concepts that affect attitudes toward corporate governance in Japan? a. Friendship, honor, loyalty b. Obligation, family, consensus c. Service, responsibility, modesty d. Integrity, responsibly, respect

Obligation, family, consensu

Poole Company recently acquired Carroll Inc. The two firms did not have identical assets, but they are complementary in unique ways. This makes it possible for them to generate: a.private synergy. b.overdiversification. c.resource slack. d.due diligence.

Private synergy

Which of the following is an assumption of the resource-based model? a.Resources and capabilities are not highly mobile across firms. b.A firm's performance across time is due primarily to the industry's structural characteristics rather than to the firm's unique resources and capabilities. c.Most firms competing within an industry or within a segment of that industry are assumed to control similar strategically relevant resources and to pursue similar strategies in light of those resources. d.Organizational decision makers are assumed to be rational individuals who are committed to acting in the firm's best interests, as shown by their profit-maximizing behaviors.

Resources and capabilities are not highly mobile across firms.

Which of the following would be considered to be part of Seaside Bar & Grill's capital market stakeholders? a.Shareholders b.Customers c.Suppliers d.Employees

Shareholders

A local community arts nonprofit organization is seeking to expand its programming and is considering putting just one new program in place this year. It may choose painting workshops for people with disabilities, summer camps for young children, a musical performing arts series for skilled musicians, or classes for seniors. The organization's most committed volunteer is a kindergarten teacher who has offered to be the leader of whichever new program the organization implements. If the nonprofit is utilizing the resource-based model of above-average returns, in which of the following ways should it expand its programming? a. Painting workshops for people with disabilities because they are not currently being offered by any other organizations in the community b. Summer camps for young children because the organization should use the knowledge of its passionate volunteer to its greatest advantage c. A musical performing arts series for skilled musicians because it has the widest appeal in the community d. Classes for seniors because they can be hosted during the day and have good attendance among those who are retired

Summer camps for young children because the organization should use the knowledge of its passionate volunteer to its greatest advantage

The Carter family has been the successful owner of a manufacturing company for more than 50 years. The company has always performed better than expected and was projected to grow for years to come. To help with this growth, the Carters decided to hire a CEO who is not from the family, the first time in its history. After the hire, the performance of the company shifted for the worse, and there is now a separation of ownership and managerial control. What is the best next step? a. The Carters should align the goals of the family and the CEO. b. The CEO should diversify the company, as it has reached the end of its growth projection. c. The Carters should appoint a family member as CEO, as research shows that family-owned firms perform better when a member of the family is the CEO. d. The Carters must sell the company to a larger corporation

The Carters should appoint a family member as CEO, as research shows that family-owned firms perform better when a member of the family is the CEO.

Which of the following is a value-generating activity? a. A service the company provides to customers that they pay for b. The core competencies that a company holds that make it possible for it to serve customers in a different way from its competitors c. A new machine that reduces energy costs within a company d. A customer promotion or sale

The core competencies that a company holds that make it possible for it to serve customers in a different way from its competitors

What is quite possibly the most critical skill for a strategic leader to possess? a. The ability to create a context in which stakeholders can perform efficiently b. The ability to think innovatively c. The ability to respond to changes in the external environment d. The ability to attract and manage human capital

The ability to attract and manage human capital

Two American appliance firms have equal share of the market. U.S. Elite, one of the firms, has decided to implement an international strategy in China. The firm is looking to grow manufacturing and start selling internationally while increasing its competitive advantage in the process. Why is a cross-border strategic alliance the most effective option for U.S. Elite? a. The alliance enables U.S. Elite to share resources for manufacturing and knowledge about the Chinese market. b. The alliance keeps U.S. Elite from sharing resources with Chinese manufacturers to help them with manufacturing. c. The alliance gives U.S. Elite minimal responsibility for its foreign operations in China. d. The alliance gives the Chinese manufacturer sole control of U.S. Elite operations.

The alliance enables U.S. Elite to share resources for manufacturing and knowledge about the Chinese market.

A construction company is pursuing a focused differentiation strategy, and after reviewing its core competencies, the leaders have decided to specialize in hospital construction. Which of the following is an example of how that strategy is addressing the bargaining power of buyers (customers)? a. The company accepts a lower profit margin rather than raise prices after its supplier of medical regulators raises prices. b. The company participates in competitive bidding processes, and despite often submitting a higher bid than competitors, it is awarded the job based on its expertise. c. In a year where only a few hospitals are being built, the company's leaders decide to offer discounted pricing to customers to ensure that they have a steady stream of work. d. Seeing the success of the hospital construction company, other construction firms decide to narrow their focus and create business units dedicated to this customer segment.

The company participates in competitive bidding processes, and despite often submitting a higher bid than competitors, it is awarded the job based on its expertise.

What is the most likely outcome for a company if the executives never analyze competitors' possible reactions to competitive actions the firm takes? a. The company will most likely not be able to compete successfully within the industry because competitors might neutralize its competitive advantage. b. The company will most likely not be able to compete successfully within the industry due to unlawful actions that it was unaware of. c. The company will still be able to compete successfully within the industry as long as it has an efficient corporate structure. d. The company will still be able to compete successfully within the industry if it has effective marketing.

The company will most likely not be able to compete successfully within the industry because competitors might neutralize its competitive advantage.

Which of the following statements about the impact structure and strategy have on each other is true? a.The effect of strategy on structure is stronger than is the effect of structure on strategy. b.The effect of structure on strategy is stronger than is the effect of strategy on structure. c.The effect of structure on strategy is about the same as the effect of strategy on structure. d.Once in place, neither structure nor strategy has a noticeable effect on the other.

The effect of strategy on structure is stronger than is the effect of structure on strategy.

What tends to happen when the board of directors is involved in shaping the strategic direction of a firm? a. The firm's performance improves. b. There is a high rate of turnover among top-level managers. c. There is a high rate of turnover among middle-level managers. d. The firm is unable to respond quickly to market changes

The firm's performance improves.

Which of the following is NOT a reason for a firm to respond to a competitor's action? a. The action leads to better use of the competitor's capabilities to develop a stronger competitive advantage or an improvement in its market position. b. The action damages the firm's ability to use its core competencies to create or maintain an advantage. c. The firms have resource dissimilarity. d. The firm's market position becomes harder to defend

The firms have resource dissimilarity.

Which of the following statements about determining which customer needs to satisfy is NOT true? a.In a general sense, needs are related to a product's benefits and features. b.Customers prefer to buy customized products. c.The most effective firms strive continuously to anticipate changes in customers' needs. d.The generalized forms of value that products provide are either high cost with acceptable features or similar features with acceptable cost.

The generalized forms of value that products provide are either high cost with acceptable features or similar features with acceptable cost

Calming Hotels, Inc. has opened two more hotels near the state park. The owner believes that he is not working as efficiently as he did when he had only one hotel. All of the management and maintenance tasks are not completed in a thorough and timely manner. Which of the following could be a cause associated with his company's growth? a. Hotel employees are not performing like they should. b. The growth in sales has caused issues that the previous structure can no longer handle c. Poor marketing and commercialization strategies are in use. d. The hospitality industry as a whole is declining.

The growth in sales has caused issues that the previous structure can no longer handle

A top-level executive of a tire manufacturer is considering diversifying and expanding operations into China, where labor and materials are cheaper. The firm has already diversified itself to double its original number of locations. All of its newest locations have been implemented by the same executive. So far, the return on investment for each of the newer locations is negative. Why might the executive want to open yet another location? a. The larger the firm gets, the less compensation the executive will receive because no value has been created. b. The larger the firm gets, the more compensation the executive will receive, even if no value has been created yet. c. The executive is worried about creating jobs, even if there is no value created for the manufacturer. d. The executive predicts that the return on investments will provide positive returns soon.

The larger the firm gets, the more compensation the executive will receive, even if no value has been created yet.

The chief executive officer (CEO) and other top-level managers often involve other people to develop the mission statement because: a.the mission deals more directly with product markets and customers. b.it is viewed as a task that can easily be delegated. c.the mission deals more directly with capital markets and shareholders. d.forming the mission is typically not the final responsibility of the CEO or other top-level managers.

The mission deals more directly with product markets and customers

Lenox Enterprises needs to hire a new CEO. The board of directors is weighing whether to seek a candidate from the internal managerial labor market or external managerial labor market. Which of the following factors would cause them to lean towards hiring a CEO from outside? a.The need for a CEO who can engineer strategic change b.The need for a CEO with a clear understanding of the firm's personnel c.The need for a CEO who has a good "feel" for what will and will not "work" in the firm d.The need for a CEO who can identify core competencies and develop new ones.

The need for a CEO who can engineer strategic change

What is the definition of ownership concentration? a. The ratio of owners and their specialty fields of training to the industry of the company b. The number of large-block shareholders and the total percentage of the firm's shares they own c. The total number of shareholders of a company d. The percentage of shareholders who are internal versus external

The number of large-block shareholders and the total percentage of the firm's shares they own

Which of the following statements about the recent global emphasis on corporate governance is NOT true? a. Corporate governance is of concern to nations as well as to individual firms. b. Although corporate governance reflects company standards, it also collectively reflects the societal standards of nations. c. Research shows that firms seek to invest in nations with national governance standards that are acceptable to them. d. The recent global emphasis on corporate governance stems mainly from the need to give shareholders more power in organizations.

The recent global emphasis on corporate governance stems mainly from the need to give shareholders more power in organizations.

Spark is the only energy company in the fictional country of Blacksburgia and therefore holds a monopoly in its home country. Spark's lack of competition in its home country can contribute to an international strategy in which of the following way? a. Access to raw materials is not a problem in the home country. b. The company has perfected its consumer relationship. c. Other countries may have companies offering similar products. d. The resources gained at home can be invested in international markets.

The resources gained at home can be invested in international markets.

Which of the following is an example of the mobility of strategies and resources across firms in the mobile network industry? a. Sprint utilizes an innovative marketing strategy to illustrate its price competitiveness compared to Verizon and AT&T. b. Verizon utilizes its high capital availability to invest in a higher quantity of cell towers to achieve a broad geographic network, serving both urban and rural areas. c. A high-level engineer from AT&T is prevented from working for Verizon for five years by a non-compete agreement. d. The spread of 4G technology between Verizon, AT&T, and Sprint makes the high-speed network available to nearly all mobile phone customers.

The spread of 4G technology between Verizon, AT&T, and Sprint makes the high-speed network available to nearly all mobile phone customers.

A small software firm has formed a cooperative strategic alliance with a startup company to develop the startup's product, an app for smartphones. The startup promised to connect the software firm with other startup companies looking for software services. So far, the startup has not followed through, while the software firm has neared completion of its portion of the app development. Based on this scenario, which risk has manifested in the alliance between the software firm and the startup company? a. The software firm has misrepresented its resources to the startup. b. The startup has failed to make its resources available to the software firm. c. The software firm has failed to make its resources available to the startup. d. The startup is acting opportunistically towards the software firm.

The startup has failed to make its resources available to the software firm.

Which of the following statements about tangible resources is true? a. Compared to intangible resources, tangible resources are a superior source of capabilities and, subsequently, core competencies. b. Firms prefer to rely on them rather than intangible resources as the foundation for their capabilities. c. The value of tangible resources is constrained because they are hard to leverage. d. Intellectual capital is the most important tangible resource for today's leaders to develop.

The value of tangible resources is constrained because they are hard to leverage.

Which of the following statements about corporate governance in China is NOT true? a.The state still relies on direct and/or indirect controls to influence the strategies employed by most firms. b.Corporate governance in China may be tilting toward the Western model. c.Firms with higher state ownership tend to have lower market value and more volatility across time. d.There has been a gradual increase in the equity held in state-owned enterprises while the number and percentage of private firms has declined.

There has been a gradual increase in the equity held in state-owned enterprises while the number and percentage of private firms has declined.

Ronson Foods, a corporation that operates more than 400 large supermarkets in 12 states in the northeastern United States, is considering acquiring East Coast Organics, a small chain of 26 specialty food stores known for their friendly atmosphere and humorous advertising. While many see the potential in this acquisition, some analysts worry about the integration process following the acquisition. What is a difference between the two that might cause difficult integration? a. East Coast Organics has a smaller share of the market. b. Both firms are experiencing financial instability. c. Ronson Foods and East Coast Organics have been competing in the same domestic market. d. There may be cultural differences in operations between the two firms.

There may be cultural differences in operations between the two firms.

As web development continues to grow as a career field, more and more education options are being created for interested mid-career professionals. A software firm that has developed online courses for people to learn web development has decided to partner with a popular computer manufacturer to build a laptop with a special keyboard and interface elements for web development education. The idea came after a competitor implemented a similar strategy to develop a smartphone interface compatible with educational software. Which of the following is a motive for the education and computer firms to implement a cooperative strategy? a. To minimize their rivals' returns b. To gain a higher a price point than their rivals c. To outperform rivals with a similar idea d. To neutralize competition with rivals

To outperform rivals with a similar idea

An American sandal company has completely saturated its local market. The sandals, which are made of specially molded rubber soles that minimize soreness associated with unsupportive soles, have started to build a demand in Australia, a market the company is unfamiliar operating in. Why might the sandal company enter into a cooperative strategy with an Australian firm? a. To explore export options from the United States to Australia b. To give responsibility of the company's expansion to the Australian firm c. To share unique resources to design, produce, and launch the product in Australia d. To take advantage of the Australian company in a hostile takeover

To share unique resources to design, produce, and launch the product in Australia

BlackBerry, a one-time leader in secure cell phones, lost its edge. Without significant upgrades or innovation, the company quickly lost market share to iPhones and Android devices. The company attempted to imitate these advances with the Blackberry Storm product, which flopped. Blackberry was criticized as trying to leverage capabilities beyond its core competencies. Which of the following tools should Blackberry use to regain a scope of its core competencies and determine potential sources of competitive advantage? a. External environmental analysis b. Competitor analysis c. Industry analysis d. Value chain analysis

Value chain analysis

What is the distinction between value-neutral reasons and value-creating reasons for a firm to diversify? a. Value-neutral reasons seek to help the firm establish a more competitive position, whereas value-creating reasons seek to serve the managers of the firm. b. Value-neutral reasons seek to serve the managers of the firm, whereas value-creating reasons seek to help the firm establish a more competitive position. c. Value-neutral reasons seek to improve the firm overall, whereas value-creating reasons seek to help the firm establish a more competitive position. d. Value-neutral reasons seek to help the firm establish a more competitive position, whereas value-creating reasons seek to improve the firm overall

Value-neutral reasons seek to help the firm establish a more competitive position, whereas value-creating reasons seek to improve the firm overall.

Which of the following is an example of a subscription business model? a. We Craft Box, which delivers monthly craft supplies and instructions for children for about $25 per month b. Mint finance tracking software, which is offered at no cost as an introduction to QuickBooks' other subscription services c. KFC, which licenses individuals to use its trademark and processes when selling its branded fried chicken and other fast-food products d. The Facebook social media platform, which is available to users at no cost and earns its income from paid advertising aimed at those users

We Craft Box, which delivers monthly craft supplies and instructions for children for about $25 per month

When examining the component of Future Objectives for a competitor analysis, which of the following is NOT a question that is addressed? a.How do our goals compare with our competitors' goals? b.Where will emphasis be placed in the future? c.What is the attitude toward risk? d.What is our future break-even point?

What is our future break-even point?

Corporate-level strategy is concerned with which of the following key issues? a. What product markets the firm can compete in as a standalone business b. What businesses the firm should plan to acquire to increase its competitive advantage c. What product markets and businesses the firm should compete in and how corporate headquarters should manage those businesses d. What product markets and businesses the firm should compete in and how the firm should manage itself

What product markets and businesses the firm should compete in and how corporate headquarters should manage those businesses

Which of the following statements regarding firms following a differentiation strategy is NOT true? a. Although a firm that has successfully differentiated its products typically develops a loyal following that is less price sensitive, it must always be aware of rival products and respond by continuing to improve the value of its own products. b. A firm that has successfully differentiated its products may have to pay higher costs for high-quality components, but these costs are offset by the firm's higher margins. c. When a firm succeeds at differentiating its products, it acts as a magnet attracting potential new entrants into the market. d. When a firm has successfully differentiated its products from other competing products, it decreases the likelihood that consumers will opt for product substitutes.

When a firm succeeds at differentiating its products, it acts as a magnet attracting potential new entrants into the market.

Which of the following statements regarding managerial succession issues is NOT true? a.When the new CEO is from inside the firm and a heterogeneous top management team is in place, the strategy may not change, but innovation is likely to continue. b.Employees commonly prefer that firms use the internal managerial labor market when selecting top management team members and the CEO. c.When a new CEO is selected from outside the firm, a change of strategy is likely, especially if the top management team is homogenous and highly cohesive. d.When a new CEO is selected from outside the firm and a homogeneous top management team is in place, high strategic change frequently leads to performance declines.

When a new CEO is selected from outside the firm, a change of strategy is likely, especially if the top management team is homogenous and highly cohesive.

What does it mean when an acquisition is unable to achieve synergy? a. When a firm finds itself in extraordinary debt as the result of acquiring another firm b. When the acquiring firm and acquired firm do not effectively share resources, economies of scale, and economies of scope across the businesses c. When a firm has too many business units and no clear method of measuring their performance d. When a firm becomes so large it does not have the economics necessary to manage the complexity of the organization made by the acquisition

When the acquiring firm and acquired firm do not effectively share resources, economies of scale, and economies of scope across the businesses

Product market stakeholders often have very different priorities, but each can exert power and influence over a company. Which of the following correctly describes a way that a product market stakeholder exerted its power to the potential detriment of a company? a. Protesters swarmed and picketed Hobby Lobby after it won a U.S. Supreme Court decision allowing it an exemption from covering employees' contraceptives on religious grounds. b. During the Great Recession, the United Auto Workers (UAW) union agreed to a pension restructuring with the three big U.S. car manufacturers. c. AIG's shareholders sued the U.S. government, arguing that the bailout the company received wasn't beneficial enough to financial investors. d. McDonald's announced wage increases for employees at its corporate-owned stores after months of protests by employees.

a. Protesters swarmed and picketed Hobby Lobby after it won a U.S. Supreme Court decision allowing it an exemption from covering employees' contraceptives on religious grounds.

If a firm does not have core competencies in an area required to achieve a competitive advantage, it must: a.change its product line. b.acquire the resources needed to build those competencies. c.analyze the internal organization to identify strengths. d.analyze the internal organization to identify weaknesses.

acquire the resources needed to build those competencies.

Of the five entry modes, which is often the quickest means for firms to enter international markets? a.Licensing b.Strategic alliance c.Exporting d.Acquisition

acquisition

Each business-level strategy can help the firm establish and exploit a particular competitive _____ as the basis for how it will create value for customers within a particular competitive _____. a.advantage; scope b.scope; advantage c.geographic area; market d.cost; activity

advantage, scope

Christina's contract with Nationwide Mutual Insurance Company is an example of: a.an agency relationship. b.managerial opportunism. c.corporate governance. d.a strategic alliance.

agency relationship

A business-level strategy is: a. a marketing and positioning program designed to explain a business to its customers. b. an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in a specific product market. c. the actions the firm takes by selecting and managing a group of different businesses competing in different product markets. d. a set of actions and commitments through which the firm sells its products outside of its domestic market.

an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in a specific product market.

Which of the following is NOT an incentive to diversify that comes from a firm's internal environment? a.Low performance b.Antitrust regulations c.Uncertain future cash flows d.Reduction of risk for the firm

antitrust regulations

Car manufacturers have a large lead time on new products. If an idea for a feature on a vehicle is developed, it will likely be two years before consumers know about it and can decide if they want to buy it. Consumer trends are sometimes short lived as they are always evolving. Which external environmental analysis element is a primary focus of car manufacturers? a. Scanning b. Monitoring c. Forecasting d. Assessing

assessing

A company is analyzing its value chain to discover its value-creating activities. While formulating its strategy, the firm will: a. consider the value chain activities and support functions to determine which activities contribute the greatest value in the product or service being sold to customers. b. create functional departments to manage these activities. c. expand into multiple markets to serve as many customers as possible with its value-creating activities. d. prioritize only its support functions as a source of competitive advantage.

consider the value chain activities and support functions to determine which activities contribute the greatest value in the product or service being sold to customers.

Sarah often meets with clients over lunch. She is hesitant to schedule these lunch meetings at Green Café. While the food is excellent, sometimes the service is fast, but other times it can take up to two hours for a simple meal. Green Café is vulnerable to attack from competitors because it suffers from poor service quality in which dimension? a.Serviceability b.Courtesy c.Accuracy d.Consistency

consistency

A core rigidity arises when a: a. core competency generates inertia and stifles innovation, often because of conditions in the external environment. b. corporation refuses to change its strategies without an action by the board of directors. c. company puts all of its strategic decisions up for a vote by the company employees. d. firm is led by a CEO with a rigid sense of mission that cannot be swayed.

core competency generates inertia and stifles innovation, often because of conditions in the external environment.

Turtlecreek owns a high-end grocery chain, a high-end outdoor gear chain, and a sporting goods chain. Its retail businesses are unrelated; however, the firm hopes to gain an advantage over its competitors by associating its perceived luxury brand with each business. By selecting and managing these various businesses, Turtlecreek is implementing a _____ strategy. a. business-level b. corporate-level c. firm-level d. small-business

corporate level

An oil company develops an innovative refining process that reduces the time required to produce gasoline by 25 percent. The company has identified its unique process as a core competency. Which of the following strategies would be most beneficial for the company to pursue? a. Differentiation b. Cost leadership c. Focused differentiation d. Integrated cost leadership/differentiation

cost leadership

Clark has a business and is in need of a functional structure. His strategy is to sell as much as possible and spend the least amount of capital as possible. He wants his employees to be compensated when they can find cost-cutting tactics. What type of functional structure would you recommend Clark implement? a. Structure flexibility b. Structure stability c. Cost leadership d. M-form structure

cost leadership

When a company in a cooperative strategy is implementing mechanisms to ensure that its partner does not use its trade secrets to benefit outside the relationship alone, a firm is practicing which cooperative strategy management practice? a. Cost maximization b. Cost minimization c. Opportunistic minimization d. Opportunity maximization

cost minimization

Two approaches used to manage cooperative strategies are: a. cost minimization and opportunity maximization. b. cost maximization and opportunity maximization. c. cost minimization and opportunity minimization. d. cost maximization and opportunity minimization.

cost minimization and opportunity maximization.

What type of network alliance is most likely used in industries characterized by short product life cycles? a.Dynamic alliance networks b.Horizontal alliance networks c.Stable alliance networks d.Vertical alliance networks

dynamic alliance networks

Two courses of action to meet the needs of customers while reducing the workforce include: a.developing a flexible workforce by cross-training employees and paying extra attention to the best customers. b.implementing self-serve methods to compensate for lack of employees and customer loyalty programs to retain customers. c.outsourcing human resources and customer service. d.repositioning the firm in a complementary industry where customer service is minimal, thereby attracting different types of customers.

developing a flexible workforce by cross-training employees and paying extra attention to the best customers.

When a firm makes continual improvements to the processes used to produce, sell, distribute, and service its products across country borders, its ability to learn how to reduce costs and increase the value of its products for its customers is enhanced. The firm is: a. increasing its market size. b. achieving strategic competitiveness. c. developing economies of scale and learning. d. gaining a local advantage

developing economies of scale and learning.

All of the following are characteristics that account for how functional organizational structures handle the differences in their matching strategies EXCEPT: a. centralization. b. specialization. c. formalization. d. differentiation

differentiation

Kristine Woods and her husband, Liam, own a café, Simply Healthy, in their hometown. Simply Healthy offers only natural and healthy options on its menu and uses only locally grown food. It charges slightly higher prices than the other restaurants in town, but health-conscious customers are willing to pay a premium. Simply Healthy operates using a _____ strategy. a.differentiation b.focus c.cost leadership d.consolidation

differentiation

Pat and Lee have been asked to complete a value chain analysis. Which component of an internal analysis are they performing? a.Identifying tangible resources b.Exploring capabilities c.Discovering core competencies d.Analyzing strategic competitiveness

discovering core competencies

Cell phones and digital music files are examples of: a. hypercompetition. b. disruptive technologies. c. knowledge. d. core competencies

disruptive technologies

Which of the following structures is used by Visa credit cards, which coordinates bank affiliated credit cards and transactions in Asia Pacific, Canada, Europe, Latin America and United States regions? a. Functional b. Horizontal complementary strategic alliance c. Franchises d. Distributed strategic network

distributed strategic network

What type of organizational structure is used to manage international cooperative strategies? a.Strategic business unit b.Distributed strategic networks c.Related constrained d.Vertical complementary

distributed strategic networks

In contrast to managers, shareholders may prefer that free cash flow be: a.distributed to them as dividends. b.used to reduce debt of the firm. c.reinvested in lucrative corporate assets. d.used for purposes of further diversifying the firm.

distributed to them as dividends.

Intangible resources are more flexible than tangible physical assets in facilitating a. diversification. b. firm operations. c. product production. d. value creation.

diversification

A firm in France that makes locally made designer loafers has decided to expand its operation to the United States to meet the "Made in America" market demand. In order to do so, the firm has decided to partner with a United States shoe manufacturer to produce the loafers. What type of strategic alliance would best fit the partnership the firm is looking for? a. Synergistic b. Diversifying c. Franchising d. Business

diversifying

Overdiversification often leads to a decision to: a.issue junk bonds. b.divest some units. c.increase the debt load. d.seek new acquisitions.

divest some units

Which type of restructuring strategy generally leads to more positive outcomes in both the short and long term? a.Management buyout b.Whole-firm buyout c.Downscoping d.Downsizing

downscoping

generally leads to more positive outcomes in both the short and long term. a. Downsizing b. Downscoping c. A leveraged buyout d. A nonleveraged buyout

downscoping

Based on the various long-term outcomes, which restructuring strategy is the least recommended to implement? a. Downsizing b. Leveraged buyouts c. Downscoping d. Corporate restructure

downsizing

Tommy's Toys, once the leading children's toy retailer in the region, has seen declining profits over the past decade. The firm has decided to close all of its 38 stores and move to an online-only retailing operation. Although it will need to expand its warehouse operations by about 100 employees, it will be eliminating approximately 500 retail sales employees. What is this restructuring strategy called? a. Downscoping b. A leveraged buyout c. Downsizing d. Restructuring

downsizing

Which of the following is NOT an expected outcome of a management buyout? a.Improved performance b.Downscoping c.Increased strategic focus d.Downsizing

downsizing

MarTech is a technology firm. It must constantly develop product innovations and seek new markets. Its products are made up of a combination of hardware, requiring multiple component parts, and software which is regularly updated. What type of alliance network will MarTech use in order to develop additional competitive advantages? a. A stable alliance network b. A joint venture alliance network c. A dynamic alliance network d. A nonequity alliance networ

dynamic alliance network

Vision

what we want to be

As a driver of competitive behavior, ability refers to: a.a firm's understanding of the consequences of its competitive actions and responses. b.each firm's resources and the flexibility they provide. c.competing firms' level of market commonality and resource similarity. d.a firm's incentive to take action or to respond to a competitor's attack

each firm's resources and the flexibility they provide.

An industrial fabrication firm has purchased a facility capable of housing large-scale projects—as long as 120 feet. The firm could develop this tangible resource into a capability by: a. purchasing additional buildings of similar size across the country. b. buying raw metals and shipping them to the facility. c. employing engineers who can design large projects and welders who have expertise in these projects. d. selling the building to its customers for them to use for their projects.

employing engineers who can design large projects and welders who have expertise in these projects.

All of the following are competitive risks of using the cost leadership strategy EXCEPT: a.experience can narrow customers' perceptions of the value of a product's unique features. b.the processes used by the cost leader to produce and distribute its product could become obsolete because of competitors' innovations. c.too much focus by the cost leader on cost reductions may occur at the expense of trying to understand customers' perceptions of competitive levels of differentiation. d.competitors sometimes learn how to imitate the cost leader's strategy.

experience can narrow customers' perceptions of the value of a product's unique features.

Delivery Dash and Speedy Delivery, two package delivery services, negotiated with each other to jointly agree on delivery rates for the next six months. This is an example of: a.uncertainty reduction. b.explicit collusion. c.tacit collusion. d.mutual forbearance.

explicit collusion.

What is the term for a company's options outside the firm for managerial positions? a. Job market b. External managerial labor market c. Resignation market d. Internal managerial labor market

external managerial labor market

The complexities of cooperative strategies increase the challenge of effectively implementing them and may contribute to alliance: a. success. b. failure. c. partnerships. d. extensions.

failure

Apple quickly launches its next wave of innovative iPhones in order to keep up with competitors, such as Samsung and Microsoft. Imitation is rapid and inexpensive in the smartphone industry. Apple is a part of a _____ market. a. standard-cycle b. slow-cycle c. medium-cycle d. fast-cycle

fast cycle

Which product quality dimension is related to meeting operating specifications over some period of time? a.Performance b.Flexibility c.Durability d.Serviceability

flexibility

The managers at Acme National are considering several alliance options. Because the regulatory hurdles are much lower for their industry in South Korea, they are most likely going to form an alliance with a company from that country. In this situation, one of the key factors driving Acme National's consideration of a cross-border alliance is: a.limited domestic growth opportunities. b.foreign government economic policies. c.lack of capital. d.barrier to entry in a foreign market.

foreign government economic policies.

Mutual forbearance is a(n): a.complementary strategy. b.uncertainty-reducing strategy. c.form of explicit collusion. d.form of tacit collusion.

form of tacit collusion

A firm can cope with differences in governmental policies and practices in the host country in which it has implemented an international strategy by: a. forming a strategic alliance. b. setting up a wholly owned subsidiary. c. setting up in a host country where governmental policies and practices are similar to the firm's home market. d. establishing clear lines of communication between the firm and the host country's government.

forming a strategic alliance.

_____ integration exists when a company owns its own source of output distribution. a.Backward b.Forward c.Sideways d.Horizontal

forward

Franchising is a particularly attractive strategy in _____ industries where a large number of small and medium-sized firms compete as rivals. a.fast-cycle b.slow-cycle c.moderate-cycle d.fragmented

fragmented

The problems of central coordination and integration are mitigated if the firm's international operations compete in: a.friendly, geographically close countries with cultures like the culture of the international firm in question. b.geographically dispersed countries with cultures different than the culture of the international firm in question. c.culturally different countries that are close geographically. d.countries with lower gross domestic products (GDPs) than that of the international firm in question.

friendly, geographically close countries with cultures like the culture of the international firm in question.

The strategic management process is the: a. full set of commitments, decisions, and actions firms take to achieve strategic competitiveness and earn above-average returns. b. analysis of the firm's external environment and internal organization to identify external opportunities and threats. c. utilization of the resource-based model of above-average returns to identify the internal resources a company should leverage to achieve strategic competitiveness. d. set of capabilities firms use to respond to various demands and opportunities existing in today's dynamic and uncertain competitive environment.

full set of commitments, decisions, and actions firms take to achieve strategic competitiveness and earn above-average returns.

RSS Enterprises has a chief executive officer and a limited corporate staff, as well as managers for its production, accounting, marketing, development, and human resources departments. What type of structure does RSS use? a.Functional b.Network c.Simple d.Multidivisional

functional

What are the two types of combination structures that can be used by the transnational strategy? a.Multidomestic and global b.Global matrix and hybrid global c.Multidomestic and worldwide geographic area d.Transnational network and hybrid global

global matrix and hybrid global

Christopher is the CEO of a firm that another company is trying to acquire. The success of Christopher's company has declined dramatically over recent years. Christopher knows that the acquisition could help save the shareholders and other stakeholders from the turmoil that would ensue if the company went bankrupt. However, this is Christopher's only line of income for his family. He decides to defend his company from being taken over to help secure his position. Which defense strategy would you recommend be implemented that would benefit all stakeholders? a. Capital structure change b. Charter amendment c. Golden parachute d. Litigation

golden parachute

What is one risk companies could be vulnerable to if participating in a horizontal alliance? a. Deciding to change industries and having the wrong structure b. Developing a poor strategy c. Competitors taking advantage of their distraction d. Government action due to collusion

government acton due to collusion

A company can earn above-average returns only when the value it creates is: a.equal to the costs incurred to create that value. b.less than the costs incurred to create that value. c.greater than the costs incurred to create that value. d.both rare and substitutable.

greater than the costs incurred to create that value.

As compared to younger entrepreneurial ventures, larger, more established firms often: a.excel at taking entrepreneurial actions. b.have more resources to manage recognized opportunities. c.produce more radical innovations. d.have little slack.

have more resources to manage recognized opportunities.

Logan is an entrepreneur and president of his own company that makes a new software product that manages benefits administration for large multinational corporations. His startup company grew quickly to a team of about 25. A new federal law recently passed by Congress will cause small-business owners to invest in software like his to manage employee health care. Logan announces that the company will be investing in training for employees to better understand small-business owners and research and development (R&D) to create a small-business version of the software. This is an example of: a. having a strong strategic orientation and promoting innovation as a strategic leader. b. utilizing the industrial organization (I/O) model of above-average returns to determine the strategic direction of the firm. c. answering to demands made by capital market stakeholders for greater profitability. d. revising a company's vision statement to reflect changes in the competitive environment.

having a strong strategic orientation and promoting innovation as a strategic leader.

A stable strategy with innovation will result when a company has a _____ top management team and _____ CEO succession. a.heterogeneous; internal b.heterogeneous; external c.homogeneous; internal d.homogeneous; external

heterogeneous, internal

A publishing company publishes books, magazines, and scholarly journals. It is making far more money from its magazines and journals, so the firm has decided to downscope its book business, which will enable it to focus exclusively on new developments and growth in magazines and journals. What is the long-term outcome of the firm's decision? a. Lower performance b. Higher performance c. Reduced workforce d. Higher risk

higher performance

Zed Company is considering spinning off one of its divisions into a new company. What long-term outcomes can it expect? a.Reduced debt costs b.Higher risk c.Higher performance d.Reduced labor costs

higher performance

In general, large international markets offer _____ potential returns and pose _____ risk for the firm choosing to invest in those markets. a.lower; less b.lower; more c.higher; less d.higher; more

higher, less

How firms integrate the activities they complete within each business-level strategy demonstrates: a.how they differ from one another. b.how profitable they will be. c.what their cost structure is. d.whether they will have the lowest costs.

how they differ from one another

All of the following issues affect firms' efforts to merge on a coequal basis EXCEPT: a.who will lead the merged firm. b.how to fuse disparate corporate cultures. c.how to reach an agreement about the value of each company prior to the merger. d.how to determine the stock price per share for the merged company.

how to determine the stock price per share for the merged company.

A nonprofit organization is focused on providing mental health services to the homeless in its geographic area. It serves people by ensuring they receive the public assistance they are eligible for and then connects them with care providers that have expertise working with transient patients. The company's primary expenses are the salary and benefits for its staff of social workers, and it receives government funding to cover those. However, the organization does not have enough people to fill its open positions and has a waiting list of homeless people in need of case workers. Which of the following represents a weakness for the nonprofit organization? a. Fundraising b. Human resources c. Distribution d. Customer service

human resources

Which of the following is a limit to the positive effects of the diversification associated with international strategies? a.Monopolies b.Increased costs of coordination between units c.Government oversight d.Poor product quality

increased costs of coordination between units

When a firm buys a competitor, supplier, distributor, or business in a highly related industry so a core competency can be used to gain competitive advantage, this demonstrates an acquisition strategy to gain: a. decreased market power. b. resources. c. higher profitability. d. increased market power.

increased market power

Typically, a diversification strategy is used to _____ the firm's value by _____ its overall performance. a. increase; improving b. maintain; improving c. decrease; improving d. increase; decreasing

increasing, improving

The _____ environment is the set of factors that directly influences a firm and its competitive actions and responses. a. internal b. industry c. economic d. competitor

industry

When a firm uses a franchise as a form of corporate-level strategy, the franchisee gains the license of the franchisor's trademark and method of doing business through a(n): a. one-time royalty fee. b. ongoing franchise royalty rate. c. initial franchise fee and ongoing royalty rate. d. initial franchise fee

initial franchise fee and ongoing royalty rate.

A widely accepted view is that a board of directors with a significant percentage of _____ provides relatively _____ monitoring and control of managerial decisions. a.outsiders; weak b.related outsiders; strong c.related outsiders; weak d.insiders; weak

insiders, weak

An institution that holds 15 percent of shares in a company in order to be a powerful governance mechanism is an example of a(n): a. internal shareholder. b. institutional owner. c. external shareholder. d. corporate sponsor

institutional owner

A secondhand computer retailer is often mistaken for an IT-help business. As a result, tech-savvy employees of the retailer are often fixing the customers' computer issues when they come into the store. The firm that owns the secondhand computer retailer has decided to diversify and open computer repair shops selling IT services. The retailer is diversifying on the basis of employee knowledge, which is considered a(n) _____ resource. a. tangible b. intangible c. nonsubstitutable d. rare

intangible

A strategy through which the firm sells its goods or services outside its domestic market is called a(n) _____ strategy. a. local b. international c. national d. domestic

international

Effectively using executive compensation as a governance mechanism is particularly challenging for firms implementing _____ strategies. a.corporate-level b.merger and acquisition c.international d.business-level

international

Environmental trends, such as liability of foreignness, can impact a firm's choice of _____ strategy. a. international corporate-level b. national c. domestic d. business-level

international corporate level

Many companies pursue an integrated cost leadership/differentiation strategy, working to lower cost structures while also enhancing their products and services. To successfully pursue this strategy, companies could: a. invest in developing total quality management (TQM) systems and improving marketing effectiveness. b. concentrate all efforts on cost-saving projects within their production processes. c. increase exposure and brand awareness through digital and print marketing campaigns. d. develop new products every year to continue attracting customers and meet their upgrade expectations.

invest in developing total quality management (TQM) systems and improving marketing effectiveness.

A resource or capability can be classified as a core competency that can be a source for a sustainable competitive advantage if: a. it is different and better than the way a competitor is executing the same capability. b. it is the same as the capabilities offered by competitors. c. other companies use a different capability to accomplish the same goal. d. it can be purchased through outsourcing.

it is different and better than the way a competitor is executing the same capability.

A company is looking to diversify as a way to reduce risk and protect against uncertain future cash flow from its core business. These efforts would most likely have which of the following impacts on the firm's value? a. It would create new value. b. It would increase the firm's value. c. It would be value-neutral. d. It would decrease the firm's value.

it would be value-neutral

Jordan Brady just purchased an additional 2,000 shares of Singleton Inc., which means he now possesses about 6 percent of the firm's issued shares. This makes Jordan a(n): a. insider. b. institutional owner. c. angel investor. d. large-block shareholder.

large block shareholder

A firm has decided to encourage its employees to be more entrepreneurial and innovative by forming cross-functional product teams. Which of the following is the best way to incentivize these teams? a.Hold a contest for a prize b.Promise them pay increases c.Offer cash bonuses d.Let them choose their own incentives

let them choose their own incentives

A common reason firms enter into cross-border strategic alliances is: a. complete control over their foreign operations. b. limited domestic growth opportunities and foreign government economic policies. c. abundance of domestic growth opportunities and foreign government economic policies. d. help from domestic partners from an operational perspective.

limited domestic growth opportunities and foreign government economic policies.

A company is thinking about changing its organizational structure to gain a competitive edge on a consumer trend. This new consumer behavior is very profitable, and the company sees the revenue that can stem from it. However, there is research stating that the trend may not last forever and could be a "fad." Changing the structure to accommodate this new behavior may have which of the following consequences? a. Simplifying the structure b. Creating a functional structure c. Achieving environmental sustainability d. Limiting future strategie

limiting future strategies

Because managers must be involved in searching for viable acquisition candidates, completing due diligence, preparing for negotiations, and managing the integration process: a.companies acquire a larger debt load. b.managers favor diversification for their companies. c.companies are unable to achieve synergy. d.managers can become overly focused on acquisitions.

managers can become overly focused on acquisitions.

While U.S. firms use downscoping as a restructuring strategy, a.the current trend in Europe, Latin America, and Asia is to build conglomerates. b.they still use this strategy less frequently than do European companies. c.many Asian and Latin American conglomerates have also chosen to downscope. d.it is a trend that is expected to diminish with increasing globalization.

many Asian and Latin American conglomerates have also chosen to downscope.

Sandra is developing a competitor analysis for two florists. Which of the following information in the analysis will be the basis for predicting the competitors' behavior in the form of their competitive actions and responses? a. Threats b. Capabilities c. Market commonality d. Weaknesses

market commonality

the number of markets with which a firm and a competitor are jointly involved and the degree of importance of the individual markets to each is referred to as: a. market commonality. b. market analysis. c. resource similarity. d. market differentiation.

market commonality

FreeForAll is an online retailer for graphic T-shirts and hats. Previously, it was the only mass retailer for such goods. Hatz, an in-store retailer that sells predominantly baseball hats, has just launched an e-commerce site that also features T-shirts for sale. FreeForAll has decided to respond quickly to Hatz's competitive action. This decision is based on FreeForAll's: a. market dependence. b. competitive dynamics. c. reputation. d. market independence

market dependence.

Apple has been known to sell its products at higher rates than competitors, such as Microsoft, as it has been successful at convincing consumers that Apple products are special and more luxurious in comparison. By accomplishing this, Apple has gained: a. multipoint competition. b. market power. c. corporate-level core competencies. d. brand awareness.

market power

Which of the following is NOT an international corporate-level strategy? a.Global strategy b.Multicultural strategy c.Multidomestic strategy d.Transnational strategy

multicultural strategy

EMSS Services is a multinational company. Business units in each country make their own strategic and operating decisions in order to tailor specific product characteristics to the local preferences. What type of strategy does EMSS use? a.Worldwide geographic area b.Multidomestic c.Worldwide product d.Global

multidomestic

In which of the following international strategies are strategic and operating decisions decentralized to the strategic business units in individual countries or regions in order to allow each unit the opportunity to tailor its products to the local market? a. International business-level strategy b. Transnational strategy c. Multidomestic strategy d. Global strategy

multidomestic strategy

SmallTown BigWorld, Inc. created a sports game that is customized for many different locations. The company has expanded its local markets in many locations in several countries. Although the company is doing well, it has several problems. Because each location does so much on its own, the corporation doesn't share knowledge internally because of the differences across markets, decentralization, and the different international business-level strategies employed by local units. It has not been able to develop economies of scale. Which of the following strategies is the company using? a. Transnational strategy b. Multidomestic strategy c. Global strategy d. International strategy

multidomestic strategy

Donna is the retired CEO of a large hospital chain. Although her former employer never did business with MediScan, a medical device manufacturing firm, she has been asked to sit on MediScan's board of directors. In this context, Donna is a(n): a. insider. b. outsider. c. related outsider. d. large-block shareholder

outsider

A CEO recently led her company through a period of significant growth and profitability. Her structure change, new strategy, and other decisions caused the company to grow beyond expectations. As a result of her efforts, the CEO and her company won several awards and received press in magazines such as Forbes, Inc., and Chief Executive. But recently her decisions have been poor, which may have to do with lack of analysis and attention to the details of projects put before her. When her team suggests alternatives, she pushes back. What most likely happened to the CEO? a. Power and influence b. Overconfidence c. Overexertion d. Too much span of control

overconfidence

Greg is the CEO of a leading company in the consumer packaged goods industry. He is trying to grow his company for personal gain and wealth. However, Greg sees that his company has an opportunity to break into the chemical industry. He has decided to invest free cash flow into acquiring small chemical companies that have the potential for growth if funded properly. Shareholders are not happy because they are concerned about: a. underdiversification. b. overdiversification. c. diversification. d. segmentation.

overdiversification

Some people think that responsible leadership demonstrates concern for the triple bottom line, where firms seek returns for _____, _____, and _____. a.profits; power; planet b.people, profits; planet c.performance; people; profits d.people; profits; power

people, profits, planet

A clothing manufacturer that sells wholesale to small fashion boutiques has just expanded its operations internationally to South Korea. In that country, labor costs and various materials are cheaper. If South Korea contemplates closing its border to importing and exporting because of an international military conflict, the clothing manufacturer would suffer as a result of which of the following environmental risks to its international strategy? a. Economic risks b. International risks c. Political risks d. Cultural risks

political risks

Which of the following is the most critical criterion in prioritizing stakeholders? a. Status b. Reliability c. Degree of risk d. Power

power

The industrial organization (I/O) model of above-average returns: a. puts emphasis on the external environment, which plays a role in determining a company's ability to achieve above-average returns. b. concentrates on the unique resources and capabilities of a firm to direct its strategic management process. c. is a new approach to strategic management that emphasizes technological advancement. d. is critical to competing in the global economy and the information age because of its emphasis on organizational development

puts emphasis on the external environment, which plays a role in determining a company's ability to achieve above-average returns.

Which of the following is a value-neutral reason for diversification? a.Reacting to new tax laws b.Seeking market power c.Increasing managerial compensation d.Diversifying managerial employment risk

reacting to new tax laws

Which of the following is NOT a reason that firms are willing to accept the challenge of managing different consumer tastes and practices linked to cultural values or traditions in different markets? a.The potential to enhance the firms' size b.The potential to enhance the firms' performance c.Limited growth opportunities in their domestic market d.Reduced taxes and tariffs

reduced taxes and tariffs

Managerial employment risk is _____ with increased diversification because a firm and its upper-level managers are less vulnerable to the _____ in demand associated with a single or limited number of product lines or businesses.

reduced, reduction

The outcomes a firm achieves by using a global strategy become more desirable when the strategy is used in areas in which _____ integration among countries is occurring. a.geopolitical b.multinational c.national d.regional

regional

A popular juniors clothing store features young designers and has been very successful. To gain strategic competitiveness, the clothing store frequently acquires young social-media sensations' designs and brings their designs to life in the store. What type of acquisition is the store using to increase its strategic competitiveness? a. Unrelated acquisition b. Related acquisition c. Cross-border acquisition d. Vertical acquisition

related acquisition

Rupert Information is a multinational publisher of newspapers, magazines, and popular fiction books. In the last few years, it has purchased a K-12 educational publisher and an online news service. Both of these purchases are: a.mergers. b.horizontal acquisitions. c.related acquisitions. d.vertical acquisitions.

related acquisitions

The four determinants of national advantage are factors of production; demand conditions; firm strategy, structure, and rivalry; and: a. nature and size of domestic market. b. related and supporting industries. c. factors of distribution. d. unrelated industries.

related and supporting industries

The M-form is used primarily to support the implementation of: a.focus strategies and business-level strategies. b.related and unrelated diversification strategies. c.business-level strategies and some corporate-level strategies with low levels of diversification. d.corporate-level strategies and some business-level strategies with high levels of diversification.

related and unrelated diversification strategies

Which of the following types of diversification strategies is characterized by less than 70 percent of revenue coming from the dominant business and limited links between businesses? a. Dominant-business b. Related constrained c. Related linked d. Unrelated

related linked

Which of the following is a means considered to improve the effectiveness of outside directors? a.Requiring that outside directors act objectively, having no ownership interest in the firm b.Requiring outside directors to own significant equity stakes in the firm as a prerequisite to holding a board seat c.Mandating that all outside directors come from government or academia rather than industry as a prerequisite for holding a board seat d.Requiring that outside directors be former executives of the firm as a prerequisite to holding a board seat

requiring outside directors to own significant equity stakes in the firm as a prerequisite to holding a board seat

Corporate governance does NOT include: a.ensuring that top-level managers' interests are aligned with the interests of stakeholders. b.resolving conflicts among corporate employees. c.establishing and maintaining harmony between the firm's owners and its top-level managers whose interests may conflict. d.using mechanisms to determine and control the strategic direction and performance of organizations.

resolving conflicts among corporate employees.

FedEx and United Parcel Service (UPS) compete in many of the same markets and have similar types of truck and airplane fleets, similar levels of financial capital, and other similarities. These tangible and intangible resources between the two firms describe the: a. resource differentiation. b. resource similarity. c. market similarity. d. market differentiation.

resource similarity

capital market stakeholders are most satisfied when a company's: a. returns align with the amount of risk they incurred by investing in a company or lending the company money. b. product market stakeholders are dissatisfied. c. leadership team is earning performance-based compensation. d. employees have a low turnover rate and receive salaries that are higher than the labor market.

returns align with the amount of risk they incurred by investing in a company or lending the company money.

Amazon has capitalized on which dimension with customers in order to build customer-centric relationships? a.Reach b.Richness c.Affiliation d.Pricing

richness

Hypercompetition describes a competitive landscape in which: a. there are thousands of companies competing within the same industry for the same group of customers. b. rivalry tends to occur among global competitors who innovate regularly and successfully. c. the business is dominated by a single company, pushing all competitors to imitate its strategies and develop similar resources. d. the industry has a high cost of entry in capital investment, research and development (R&D), or hiring of talented employees

rivalry tends to occur among global competitors who innovate regularly and successfully.

Which of the following strategies could be implemented to improve a company's richness in its customer relationships? a. A radio and billboard advertising campaign featuring a celebrity endorsing the company's product b. A customer loyalty program with multiple fine-print requirements c. A baby products sale announced through a mailed postcard to the company's entire database of customers d. Satisfaction surveys following the arrival of a product

satisfaction surveys following the arrival of a product

Capital market stakeholders

shareholders, major suppliers of capital

Creating operational relatedness is achieved by: a.transferring core competencies. b.sharing activities. c.gaining market power. d.multipoint competition

sharing activities

Research has found that being a first mover is often critical to a firm's success in industries that have: a.many competitors. b.slow-cycle markets. c.short product life cycles. d.limited resources.

short product life cycles

When a firm earns below-average returns, it: a.is able to maximize the interests of all stakeholders. b.should reward those stakeholders who have the least power. c.should try to minimize the amount of support lost from stakeholders. d.should treat all stakeholders the same.

should minimize the amount of support lost from stakeholders

Which of the following is NOT a high exit barrier? a.Government and social restrictions b.Size of the industry c.Fixed costs of exit, such as labor agreements d.Emotional barriers

size of the industry

About six months ago, a mid-sized manufacturer of athletic shoes decided to pursue an integrated cost leadership/differentiation strategy. The company reduced its internal costs by consolidating the number of colors and variations it offers to customers, savings that the company passed on to consumers. At the same time, the research and development (R&D) team added a patented sole to all of its shoes. Which of the following represents the best argument for the company to continue pursuing its current business-level strategy? a. "We're getting some complaints from long-standing customers about the fact that they can only get shoes in hot pink or lime green." b. "Our women's shoes are selling at higher volumes and at greater margins than our children's and men's shoes. However, women represent 50 percent of the population but only 25 percent of our business." c. "It's true we've seen our net sales decline, but our gross profit has increased and our volumes are up year-over-year. Our patent for the sole has been approved, and the legal department says we're good to go on our advertising claims about the new sole." d. "We're getting a lot of pressure from our suppliers. They're telling us that they're going to increase the raw materials cost for our soles. Even comparing against other suppliers, we simply can't get a better price at the volumes that we're purchasing."

t's true we've seen our net sales decline, but our gross profit has increased and our volumes are up year-over-year. Our patent for the sole has been approved, and the legal department says we're good to go on our advertising claims about the new sole."

A company has just invented a piece of equipment that uses a camera to ensure that drivers do not leave a child or pet unattended in the vehicle. This new product falls under which of the following segments of the general environment? a. Technological b. Political/legal c. Global d. Sociocultural

technological

According to your text, forecasting demand for new technological products is difficult because: a.the market for technology is extremely volatile. b.the market for technology is extremely competitive. c.technology trends are continually shortening product life cycles. d.technology trends fluctuate considerably

technology trends are continually shortening product life cycles.

Companies in emerging markets frequently use the unrelated diversification strategy because of: a.the absence of a "soft infrastructure" in those markets. b.how profitable they will be. c.their market power. d.the shared control among business-unit managers.

the absence of a "soft infrastructure" in those markets.

What is the governance mechanism most closely connected with deterring unethical behaviors by holding top-level managers fully accountable for developing and supporting an organizational culture in which only ethical behaviors are permitted? a.Executive compensation systems b.The market for corporate control c.The board of directors d.Ownership concentration

the board of directors

In the resource-based model of above-average returns, a capability is: a. an input into a firm's production process. b. the foundation for a firm's mission. c. the capacity for a set of resources to perform a task or an activity in an integrative manner. d. a product of a large number of firms competing against one another in an increasing number of global economies.

the capacity for a set of resources to perform a task or an activity in an integrative manner.

Boston Pharmaceuticals acquired MediLab, one of its long-time service providers, several years ago because it saw the potential for synergies in the research and design of innovative new medications. The firm has been able to develop products that have given it a long-term competitive advantage in its markets. Which attribute explains this kind of success? a.The friendly nature of the acquisition b.The consistent emphasis on innovation c.Compatible management styles d.The two firms' relative debt position at the time of the acquisition

the consistent emphasis on innovation

When a partner's contribution is based on its intangible assets, a common risk is that: a.the firm has misrepresented the resources it can bring to the partnership. b.the firm wants to acquire as much of its partner's tacit knowledge as it can. c.one firm may make investments specific to the alliance, while the partner does not. d.the firm will behave in an opportunistic manner.

the firm has misrepresented the resources it can bring to the partnership.

Differentiation strategies are successful in addressing the competitive force of the bargaining power of suppliers because: a. the company is operating at such high volumes that it can leverage its buying position to receive lower prices. b. they prevent new companies from entering into the industry through economies of scale. c. brand loyalty is a byproduct of this strategy, leading customers to choose the company's product over its rivals' products. d. the higher margins of the firm can reduce the influence of increases in supplier costs.

the higher margins of the firm can reduce the influence of increases in supplier costs.

which of the following statements about corporate governance in Germany is NOT true? a.Agency problems are not as prevalent in many private German firms. b.Employees, union members, and shareholders appoint members to the Aufsichtsrat (the supervisory tier of the board). c.The management board (Vorstand) is elected by the firm's employees. d.The Vorstand of a German corporation makes decisions about strategy and management.

the management board (Vorstand) is elected by the firm's employees.

Which of the following is an external governance mechanism that is active when a firm's internal governance mechanisms fail? a.A corporate charter b.Executive compensation c.The market for corporate control d.Capital structure

the market for corporate control

Market commonality is concerned with: a.the characteristics that are shared by different markets. b.the industry in which firms compete against each other. c.the total number of firms that compete in a market. d.the number of markets in which firms compete against each other.

the number of markets in which firms compete against each other.

The effectiveness of a business-level strategy is contingent on: a. selection of the best business-level strategy—an integrated cost leadership/differentiation strategy. b. the opportunities and threats in a firm's external environment and the strengths and weaknesses of a firm's resources. c. a firm's decision to pursue a focus strategy developed through market segmentation. d. the external communication of the strategy to a company's customers

the opportunities and threats in a firm's external environment and the strengths and weaknesses of a firm's resources.

Corporate governance is: a. a group of elected individuals whose primary responsibility is to act in the owners' best interests by formally monitoring and controlling the firm's top-level managers. b. a means by which firms collaborate to achieve a shared objective. c. the set of mechanisms used to manage the relationships among stakeholders and to determine and control the strategic direction and performance of organizations. d. defined by the number of large-block shareholders and the total percentage of the firm's shares they own.

the set of mechanisms used to manage the relationships among stakeholders and to determine and control the strategic direction and performance of organizations.

Resources have a greater likelihood of being a source of competitive advantage when: a.they are tangible in nature. b.they are intangible in nature. c.they are integrated to form a capability. d.they are implemented by top management.

they are integrated to form a capability.

DOS, a leader in the computer industry, implemented a new strategic action to offer a video streaming service to consumers. The move has proven to be successful. How are competitors likely to respond? a. They are likely to imitate the action quickly. b. They are likely to imitate the action, but only after a significant amount of time. c. They are likely to imitate the action only if other competitors take the same action. d. They are not likely to imitate the action at all

they are likely to imitate the action quickly

All of the following are ways that firms develop and use total quality management (TQM) systems EXCEPT a.to increase customer satisfaction. b.to cut costs. c.to reduce the amount of time required to introduce innovative products to the marketplace. d.to achieve competitive advantage.

to achieve competitive advantage.

Why have PepsiCo and The Coca-Cola Company spent so much money on product differentiation? a. To ruin the reputation of the other company b. To increase flexibility c. To foster customer loyalty d. To allow economies of scale

to fostor customer loyalty

Why would a company want to have a heterogeneous top management team? a. To make it easier to cohesively implement strategies b. To increase the speed of decision making c. To ensure the CEO does not have too much power d. To make better decisions

to make better decisions

Why would a firm in a standard-cycle market want to pursue a strategic alliance? a. To gain access to a restricted market b. To speed up new market entry c. To share risky R&D expenses d. To overcome trade barriers

to overcome trade barriers

Why are corporate governance mechanisms important to foreign investors? a. To prove that the organization being invested in is legitimate b. To protect their investments c. To prevent exposure for investors who might otherwise place their money in a legal gray area d. To ensure that the country's government is in control of the business, which protects shareholders' investments

to protect their investments

Which of the following is NOT a reason for using a leveraged buyout as a restructuring strategy? a.To correct for managerial mistakes b.To reduce debt for the new owners c.Because the firm's managers were making decisions that primarily served their own interests rather than those of shareholders d.To build firm resources and expand operations

to reduce debt for new owners

Many companies encourage employees to pursue entrepreneurial opportunities. While this could cause companies to lose top talent, why may companies want to foster this behavior? a. To boost employee satisfaction b. To have employee downtime be constructive c. To increase their work efficiency d. To spark innovation

to spark innovation

A large car manufacturer has acquired its tire supplier through a vertical acquisition. Unfortunately, instead of realizing economies of scale by adding to its value chain, the manufacturer has had a very small return on its investment. The firm is struggling to prioritize its efforts between manufacturing and acting as a tire supplier for outside businesses. With so much production power and so little use of it, the manufacturer's operations have become ineffective. What common problem of acquisitions has the manufacturer encountered? a. Inability to achieve synergy b. Too much diversification c. Too large d. Inadequate evaluation of target

too large

Which of the following is an example of a problem that can prevent an acquisition from being successful? a. Ability to achieve synergy b. Little to no debt c. Adequate evaluation of target d. Too much diversification

too much diversification

A firm is struggling with the behavior of its employees. There have been reports of ethically questionable behavior. When asking some employees about their motives for these actions, a common theme was uncovered. They were cutting corners to hit their performance numbers. The firm now wants to focus on ethical behavior and shift organizational culture. The company distributes emails from HR about appropriate behavior and ethics and hosts a series of office workshops on ethics. This firm is attempting to become a(n) _____ culture. a. performance-based b. values-based c. self-serving d. ethics-based

values based

Southern Poultry, a large poultry-growing operation, has agreed to be acquired by its' best customer, Chuck's Chicken 'N Biscuits, a popular regional chain of fast-food restaurants, to ensure the long-term health of the operation. This type of acquisition is called: a. a takeover. b. a vertical acquisition. c. a horizontal acquisition. d. a merger.

vertial acquistion

A company that has alliances with its suppliers and aids them in becoming modern and sustainable is an example of: a. a horizontal alliance. b. a vertical alliance. c. collusion. d. innovation.

vertical alliance

What are the two major types of complementary strategic alliances? a.Vertical and horizontal b.Competition-response and competition-reducing c.Competition-reducing and uncertainty-reducing d.Tacit and explicit

vertical and horizontal

Steeler Manufacturing uses an unrelated diversification strategy throughout its operations. For instance, Steeler has five core businesses, all of which are unrelated. Each of its businesses is large and indicates Steeler's success in implementing an unrelated diversification as a _____ firm. a. low diversified b. very highly diversified c. moderately to highly diversified d. nondiversified

very highly diversified

A _____ is a picture of what the firm wants to be and, in broad terms, what it wants to achieve. a. mission b. vision c. capability d. competitive advantage

vision

In general, family-controlled businesses will outperform nonfamily-controlled businesses because they: a.have fewer large-block shareholders. b.are more risk averse. c.want to maintain the family legacy. d.have more insiders on their boards of directors.

want to maintain the family legacy.

Suppliers are most powerful when a company: a. buys from a supplier in large quantities, making up 50 percent or more of the supplier's total sales. b. would have switching costs if it went to a different supplier because the current supplier's products are unique. c. has the capability of producing the end product without the supplier. d. has multiple suppliers to choose from that produce similar components at similar quality.

would have switching costs if it went to a different supplier because the current supplier's products are unique.