1984beg MT

One of the reasons that big box retailers like Home Depot are able to achieve economies of scale is that

they are able to take advantage of physical properties and maximize their scale efficiencies by stocking more merchandise and handling inventory more efficiently.

One of the risks of pursuing a blue ocean strategy is that a firm can find itself

"stuck in the middle."

TalkaLot Corp. incurs a cost of $350 to produce one unit of a cell phone. The company's management has priced the product at $600 in the market. Considering the technological advancement of the cell phone, customers perceive its value to be around $800. What is the economic value created in this scenario?

$450

In the United States, the time period for the right to exclude others from the use of a patented technology is ________ from the filing date of a patent application.

20 years

Which of the following statements is true of the social responsibilities of a business?

A firm's ethical responsibilities go beyond its legal responsibilities

AcerWare Inc. manufactures external hard disks for $32 per unit, and the maximum price customers are willing to pay is $47 per unit. Data Driver Inc. is a competitor of AcerWare Inc. that produces external hard disks for $37 per unit, and customers are willing to pay a maximum price of $50 per unit. What does this imply?

AcerWare creates a greater economic value than Data Driver.

The value a consumer attaches to a product or service is captured in the`

consumer's maximum willingness to pay for it.

When performing internal analysis of firms, how would you answer the question, "why do companies exist?"

Companies exist because they create value for customers in ways that customers are unable to replicate on their own

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

Nowadays Corp. distributes only 40 percent of its annual profit after taxes to shareholders, while the remaining is invested for further research and distributed among employees and the local community.

Which of the following sources of differential appeal is least effective in helping a firm sustain its advantage?

Observable product features

Golden Soles has been successful at differentiating itself from competitors by claiming a premium price for its athletic footwear based on superior design and high-quality materials. In this scenario, which of the following is the key value driver?

product features

Companies in the same strategic group are ________ to each other.

Direct competitors

Sasha is the CEO of Enterprise Technologies, a consumer electronics manufacturer. Last year, Enterprise's return on invested capital (ROIC) was 11.6 percent, while Enterprise's closest competitor, Federation Tech, had an ROIC of 17 percent. Which of the following factors might Sasha use to convince investors to invest in Enterprise rather than Federation Tech?

Enterprise's intangible intensity was 6 percent, while Federation Tech's was 3 percent

While Eye Windows incurs a cost of $12 for a pair of eyeglasses, Dura Frames, its competitor, manufactures a pair of glasses at $10. Both the companies are able to sell their glasses for a maximum of $30 per pair. Which of the following statements is true in this scenario?

Eye Windows and Dura Frames have achieved differentiation parity

Both Tom's Car Repair and Fast Engines. incur a cost of $9,000 to manufacture a vehicle. However, the economic value created by Fast Engines. is more than that created by Tom's Car Repair. What does this indicate?

Fast Engines can charge a premium price on its automobiles.

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.

Which of the following statements is true of the balanced-scorecard?

It attempts to provide a holistic perspective on firm performance.

Shippity and ShipING Inc. are two competing firms in the same industry. Shippity's tangible assets are valued at $15 billion and its intangible assets are valued at $35 billion. ShipING Inc.'s tangible assets are valued at $5 billion and its intangible assets are valued at $45 billion. What can be concluded from this information?

It is likely that ShipING Inc. is better enabled than Shippity to gain and sustain a competitive advantage.

Jill is interested in the concept of strategy and decides to create her own. As a result, Jill says that her strategy is to focus on growth and marketing to achieve competitive advantage. How would you evaluate Jill's statement?

Jill should reevaluate her statement because it fails to meet the principles of what a strategy should be.

is best described as the output range needed to bring down the cost per unit as much as possible, allowing a firm to stake out the lowest-cost position that is achievable through economies of scale.

Minimum efficient scale

Rantouch is one of the largest tax-preparation firms in the United States. It wants to acquire Doncon , a smaller rival. After the merger, Rantouch will be one of the two largest income-tax preparers in the U.S. market. What should Rantouch include in its acquisition plans?

Rantouch will need to explain to the Federal Trade Commission how the acquisition will not result in an increase in prices for consumers.

Which of the following is an implication of all firms in an industry pursuing a low-cost position through application of competitive benchmarking?

The firms would eventually have no resources to invest in product and process improvements

Which of the following provides an example of how a firm's valuable resource can be imitated?

To compete with Build Your Own's model of the Eiffel Tower, Best Replica came out with a model of the Leaning Tower of Pisa

All of the following are questions that managers should ask before crafting a business-level strategy except

When should we introduce our product/Service in the market

While the domestic airline industry is in the maturity stage of the industry life cycle, the internet-enabled appliance industry is in its growth stage. Which of the following can be inferred from the given data?

While the domestic airline industry is mostly free from excess capacity, the internet-enabled appliance industry will have new entrants.

Tablette Corp. is a consumer electronics company known for its affordable mobile devices that follows a cost-leadership strategy. In this scenario, Tablette Corp. should ideally compare its strategic position with

a consumer electronics company popular among price-conscious customers

Unlike the financial ratios based on accounting data, total return to shareholders is

an external performance metric

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

as profit per unit sold

Which of the following factors most contributes to the U.S. automotive industry being characterized by high entry barriers?

car manufacturers require large scale production in order to be cost competitive

Which of the following is primarily a value driver?

complements

Threadless allows customers to submit their own designs and to vote on which designs they would like to see printed on a T-shirt. This business uses a ________ technique.

crowdsourcing

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

direct imitation

The ___________________ suggest(s) that because the external environment changes, strategic leaders must choose their current and future investments carefully over time in order to best maintain their firm's competitive advantage.

dynamic capabilities perspective

LinkedIn, a professional social media website, allows its users to create their profiles for free, but charges a premium price for additional services. This is an example of a ________ business model.

freemium

To implement specific business strategies, general managers of strategic business units rely on

functional managers.

Facing stiff competition in the e-reader market, Smart Reads wants to protect its competitive advantage by increasing the perceived value of its reader. Smart Reads' best strategy to accomplish this would be to

highlight the number of celebrities who use Sumac e-readers

According to the resource-based view, a firm's competitive advantage often stems from its

intangible resources.

Given the accelerated pace of technological change, in combination with deregulation, globalization, and demographic shifts, a firm will be successful today only if its

internal strengths change with its external environment in a dynamic fashion.

________ are best described as the value of the best forgone alternative use of the resources employed.

it attempts to provide a holistic perspective on firm performance

Core competencies are derived from the combination of

key strategic resources and a firm's capabilities.

To initiate a strategic move that allows a firm to open up new and uncontested market space through value innovation, managers must address four key questions when formulating a blue ocean business strategy. These questions focus on

lowering cost and increasing perceived customer benefits

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

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

An observer may conclude that the organizational culture of Zappos, an online retailer for shoes and clothing, might be the basis for its competitive advantage. However, reverse social engineering to crack Zappos' code of success might be much more difficult for a company trying to exactly imitate its strategy. Thus, the source of Zappos competitive advantage is

socially complex.

The types of assets that are the primary focus of accounting data but are no longer most important to competitive advantage are

tangible.

Who among the following is responsible for making business strategies in a large conglomerate?

the general managers of individual business units

What is horizontal integration?

the process of merging with a competitor at the same stage of the value chain

The management of a company is assessing the value of all the tangible resources the company owns. Which of the following will be included in this assessment?

the punch presses that produce parts

During strategy implementation, managers primarily focus on deciding the

type of corporate governance that is most effective and ways in which it can put the formulated strategy into practice

The goal of a strategic position is to create the largest gap possible between the ________ that a firm creates through its offerings and the ________ required to create these offerings.

value; cost