WPC 480 Final

Which of the following statements correctly describes resource heterogeneity?

Bundles of resources, capabilities, and competencies differ across firms.

Which of the following statements is true of transaction costs?

Transaction costs are necessary to explain and predict the boundaries of a firm.

Which of the following provides an example of a firm in a red ocean?

Chique Apparel offered clothing at a low price but failed to differentiate its product as being exclusive.

Which of the following accurately describes GE's ecomagination initiative?

Ecomagination increases the perceived value it creates for its customers while lowering costs to produce and deliver "green" products and services.

Although demand for IKEA's low-cost furnishings has increased, its annual store growth has slowed to fewer than ten new stores a year. Why has this happened?

IKEA's global supply chain has become bottlenecked.

Which of the following is an advantage of applying the economic value creation perspective to assess a firm's performance?

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

What was Goldman Sachs' rebuttal to SEC's claim that it defrauded investors?

It is up to the clients to assess the risks involved in any investments.

Which of the following is an accurate statement about near monopolies?

Near monopolies are firms that have accrued significant market power and thereby are changing the industry structure in their favor.

What is the strategic management process?

Strategic leaders design a method to formulate and implement strategy.

Which of the following is a drawback of pursuing a multidomestic strategy?

The strategy is costly and inefficient because it requires the duplication of key business functions across several countries.

When firms innovate by leveraging existing technologies into new markets, they are said to be involved in

architectural innovations.

How does a firm capture its producer surplus for a good or service?

as profit per unit sold

Why do shareholders of public companies need to appoint a board of directors to represent their interests?

because of the separation of ownership and control

When entering a foreign market, it is advisable for a new venture that has a core competency only in R&D to form a strategic alliance with a local partner because

building downstream complementary assets can be expensive and time-consuming.

The Chief Executive Officer (CEO) of Yahoo, Marissa Mayer, established a mission by building on her vision. Considering this, how did Mayer implement the mission of Yahoo?

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

In an economic context, strategy for producers is primarily about

capturing the economic value created as much as possible.

FR Pharmaceuticals Inc., BioCure Pharma Inc., and Regime Pharma Inc. are three rival firms who have set up an alliance to conduct research and find a cure for cancer. They have made almost equal contributions to the research, and they also share their expertise with each other. However, the three firms will continue to behave as competitors in markets for other drugs and vaccines. What is this arrangement best referred to as?

co-opetition

SooGood Inc. produces a dip that goes extremely well with Crunchy Potato Chips Inc. SooGood Inc., therefore, is a ________ of Crunchy.

complementor

A ________ is best defined as a company that combines two or more strategic business units under one overarching corporation and follows an unrelated diversification strategy.

conglomerate

When a firm pursues a maintain strategy, it

continues to support marketing efforts even if the demand for the product is declining.

Michael Porter recommends that managers use the shared value creation framework to focus on

creating new regional clusters.

When two neighboring, democratic countries that are part of a trading bloc follow different religions and social norms, they most likely have high ________ distance.

cultural

In a focused cost-leadership strategy, a firm

delivers low-cost products and services to a specific, narrow part of the market.

A drawback of joint ventures is that they are characterized by

double reporting lines.

PureRinse Inc. is a brand reputed for its wide variants of body wash that introduced its range of shampoos and skin moisturizers a few years ago. Since most of its products could be produced using the same resources and technology, the company's cost structure lowered, while its product portfolio widened. In this scenario, which of the following value and cost drivers is PureRinse applying?

economies of scope

The board at TriCom Manufacturing Corp. has decided to allocate 20 percent of the company's shares to its workforce, at a discounted price. Apart from being a valued investment, the plan will allow the employees to take personal responsibility for the firm's performance. Which of the following employee incentive schemes does this best illustrate?

employee stock ownership plan

Organic Food Inc., a multinational company, relies on its media partner Radio Plus to regularly advertise its offers, sales, and new products. Radio Plus is invested in this relationship because it generates most of its revenue from advertising Organic Food's products. In this scenario, Radio Plus is Organic Food Inc.'s

external stakeholder

Which of the following contributed the most to JCPenny's failed blue ocean strategy?

failure to combine a cost-leadership position with a differentiation position

As the inventor of hypertension medication, OneSure Pharmaceuticals (OSP) Inc. was able to reap the benefits of economies of scale due to a large consumer demand for the drug. Even when competitors later developed similar drugs after the expiry of OSP's patents, regular users did not want to switch because they were concerned about possible side effects. Which of the following benefits does this scenario best illustrate?

first-mover advantages

Strategies developed at the departmental level, such as the accounting, human resources, production, and marketing departments, within a strategic business unit are referred to as ________ strategies.

functional

________ are primarily responsible for decisions and actions within their respective departments like finance, human resources, marketing, and production in a strategic business unit.

functional managers

The production department at Coral Cements that is a subsidiary of the large conglomerate Five East Corp. has decided to adopt the FIFO (first in, first out) method of inventory to dispatch its cement bags. Which of the following strategies does this scenario best illustrate?

functional strategy

True Moto Corp. (TMC) is a leading automobile company. The company has been able to sustain its competitive advantage primarily due to its high-quality and efficient electric motors. Most of its competitors have failed to develop similar electric motors at a reasonable price. Which of the following resource attributes listed in the VRIO framework has helped TMC sustain its competitive advantage?

high costs involved in imitation

Which of the following is a feature of an oligopolistic industry structure?

high entry barriers

Higher value tends to require

higher costs

Chao is in an interview for a sales job that requires no experience. He is trying to portray himself as a highly enthusiastic, energetic person with high-level communication and interpersonal skills. The interviewer is convinced that Chao should be hired as a salesperson in the company. However, in his resume, Chao had not mentioned his previous work experience as he was fired from that job because he used illegal drugs. Which of the following does this scenario best illustrate?

information asymmetry

Kerry the Kangaroo Inc. specializes in producing and selling a stuffed kangaroo named Kerry. Although the stuffed kangaroo has sold well, the clothes that can be bought to dress the kangaroo have not sold as well as expected. As a result, Kerry the Kangaroo has warehouses full of hats, pants, sweaters, and shoes to dress Kerry. This firm used a ________ to determine how much of its capital is tied up in these accessory items.

inventory turnover

Dow Corning is a company owned by Dow Chemical and Corning. This is most likely an example of a(n)

joint venture.

Which of the following types of strategic alliances is the least common in terms of frequency?

joint ventures

For a multinational enterprise (MNE), applying the globalization hypothesis would mean

manufacturing products on international platforms and slightly modifying them to meet local tastes and standards.

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

monopoly

A trend observed during the Globalization 3.0 stage involves

multinational companies organizing as global-collaboration networks.

Stellar Products Inc. is a U.S.-based consumer electronics company. It owns smaller firms in Japan and Taiwan where most of its cell phone technology is developed and manufactured before being released worldwide. Which of the following alternatives to integration does this best illustrate?

parent-subsidiary relationship

To increase its competitive advantage, HRV Automobiles seeks to improve the efficiency of its production plants. By doing this, HRV is addressing a ________ in the value chain analysis.

primary activity

Otion Inc. is a relatively new firm in the consumer electronics industry. The company's primary objective is to become the market leader in less than 5 years, for which it has to gain and sustain a competitive advantage. In the context of the VRIO framework, which of the following resources should Otion Inc. primarily focus on to achieve its objective?

production systems that reduce costs by 30 percent below the current industry standards

Pink Couture Inc. and Pink Blush Inc. are two companies in the apparel industry. While Pink Couture Inc. focuses on providing unique product features and superior customer service, Pink Blush Inc. focuses on low prices and minimal customer service. Both companies have been able to gain a competitive advantage. This is most likely because the companies have

pursued distinct strategic positions.

Incumbent firms favor incremental innovation over radical innovation because

radical innovation will disturb the existing power distribution within the firms.

Which of the following is an example of a firm's internal stakeholders?

stockholders

________ is best described as an integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage.

strategic management

Apple and Nike have their own retail outlets and also use other independent retailers, both the brick-and-mortar type and online, to sell their products. This is an example of

taper integration.

Which of the following is a major issue at the forefront of CEO compensation in recent years?

the absolute size of the CEO pay package compared with the pay of the average employee

Which of the following is not a factor that makes total return to shareholders and market capitalization unreliable measures of company performance?

the unpredictability of return on revenue

Path dependence rests on the notion that

time cannot be compressed at will.

Researchers at Games First Inc. spent several months coming up with a fun game for toddlers that incorporates a new idea in preschool education. This scenario describes step ________ of the innovation process.

two

The primary objective of Porter's five forces model is to

understand the profit potential of different industries.