WPC 480 Midterm Exam

a firm has 10 million shares outstanding, and each share is traded at $100. Also, each shareholder gets a dividend of $2,000 annually. in this case, the market capitalization is

$1 billion, that is, 10 million shares x $100

In 2008, BlackBerry's market cap peaked at $75 billion. By 2015 this valuation had fallen more than 90 percent, to less than $7 billion. BlackBerry fell victim to two important PESTEL factors in its external environment: sociocultural and technological. How did technology contribute to BlackBerry's decline?

BlackBerry failed to change its device into one that could perform multiple tasks effectively.

Upper management at ComfyShoe Inc., a manufacturer of insoles for shoes, wants to work on improving the product line is already has without taking on other challenges at this time. Which of the following vision statements reflects that goal?

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

Susan is trying to determine if her company has a competitive advantage. She must be able to accomplish two critical tasks before she can substantiate this claim. First, she must assess the performance of her company accurately; second, she must:

Compare and benchmark her firm's performance to other competitors in her same industry

All of the following are external stakeholders except which of the following?

Competitors

which of the following applies to the Strengths-Threats quadrant of the SWOT matrix?

The local fast-food chain Easy Hot Dogs used its wholesome image to maintain its competitive advantage against stiff competition

Which of the following is an examples of a business acting upon an organizational core value?

Emerald Autos reduces engine emissions below federal guidelines to reduce pollution.

several senior managers recently left Fred's autos inc. and went to work at better autos inc., a rival company. what does this imply?

Fred's Autos Inc. faced resource leakage.

Fun Robotics produces components used in electronic toys. In fiscal year 2017, Fun Robotics earned an accounting profit of $3 million. However, Fun Robotics' production facilities might have also been used to produce components for mobile phones, which would have generated $2 million in revenues and saved the company $500,000 in production costs. Which of the following statements is true?

Fun Robotics earned an economic profit of $500,000.

Maria is the Chief Operating Officer of the start-up Apps4U. In which of the following scenarios does Maria exhibit strategic leadership?

Maria schedules a meeting with the manager of the marketing department and overcomes his skepticism about a new campaign aimed at customers in the 55+ age group. Over the next three months, AppPalace gains 250,000 new users in that group.

Which of the following scenarios best illustrates a good stakeholder strategy?

PA Corp. distributes only 70 percent of its annual profit after taxes to shareholders, while the remaining is distributed among employees and the local community, and invested for further research.

In order to better achieve a competitive advantage, firms must now adopt a holistic approach towards satisfying multiple stakeholders opposed to focusing on the needs of their stockholders. This integrative approach is referred to as:

Stakeholder strategy

which of the following examples uses a focused differentiation strategy?

a cosmetics brand that offers superior skin lotion for sensitive skin priced at 100 dollars per bottle

Pete's bikes enjoy the competitive Advantage as a cost leader because high demand for its products has allowed it to operate at the minimum efficient scale. Which of the following scenarios would be most concerning to the managers of petes bikes?

a major winter storm shuts down Pete's production for several days

Which of the following summarizes the difference between a firm's vision and mission.

a vision states what a firm wants to accomplish; a mission states how a firm plans to accomplish this vision

If SA Pharmaceuticals obtains an 18 percent return on invested capital, which of the following will help determine if it has a competitive advantage over other pharmaceutical companies?

comparing the return to the return on invested capital obtained by other firms in the industry

to help a firm achieve a competitive advantage, each distinct activity performed in the value chain needs to

contribute to the firm's strategic position as either low-cost leader or differentiator

which of the following describes an airline that is most likely stuck in the middle?

eastern airlines offers high quality beverages and meals, plush airport lounges, only a few connections via hubs domestically, poor customer service, and low profits

marriott is able to create greater economic value than its competitors due to their ability to take advantage of ______, which describe that savings that come from producing two (or more) outputs at less cost than producing one output individually, while utilizing the same amount of resources and technology

economies of scope

to support the rise of emergent strategies, an organization should

empower lower-level employees to take up autonomous actions.

Silvio is a manager at a software firm. The CEO tells him that the industry as a whole has become increasingly profitable over the past five years. Based on this information, Silvio is most likely to expect

increased competition in the future and therefore he should recommend that the company upgrade its products to slow the entry of rival companies

we cut Corners Lawn Service initially spent 9 man hours to assemble a lawn mower. But as the production doubled, the number is spent on assembling a mower Reduce by 20% this increase in productivity reduce the company's cost per unit what is this phenomenon known as

learning curve effect

which of the following options below would serve as a feasible option when deciding how to enter an established industry?

leverage existing assets

Iceberg Storage, a leading hard drive manufacturer, recently filed for bankruptcy. While most of Iceberg's competitors were shifting away from physical data storage devices toward online cloud storage services, Iceberg invested most of its retained earnings in the effort to improve its hard drives. Once the hard-drive market drastically declined, Iceberg Storage was unable to capitalize on the new technology. Which of the following does this scenario best illustrate?

path dependence

Nam-zim sells its e-book readers at the cost price of $15 each. However, the company makes its profits when users have to download or buy books online. Which of the following business models is Nam-zim implementing?

razor-razor blade

Amazon.com's network of distribution centers allow it to drastically reduce its delivery times compared to other online retailers. these distribution centers are examples of Amazon's

tangible resources

which of the following is likely to happen due to horizontal mergers between competitors such as Delta and Northwest airlines?

the overall industry profitability will increase

after trying on a dress, a consumer assess it to be worth a maximum of $100 and is willing to ay that amount for the dress. However, the dress was priced at $80. What is the amount, $100, referred to as?

the value (V) the consumer attaches to the dress

For a firm that operates in an industry where competition is high, which of the following practices will result in inferior performance?

trying to be everything to everybody by combining different competitive strategies

Which of the following features about a buyer indicates that the buyer has high bargaining power?

when the buyer operates in an industry where products are undifferentiated