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What is an example of competitive parity?

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

Serendipity

A surprise event that leads to a change in strategic initiatives, such as the accidental discovery of a new use for an existing product,

What fundamental insights was provided by Porter's five forces framework from the completion of the Alta Velocidad Española (AVE)?

Any of the five forces on its own, if sufficiently strong, can extract industry profitability.

A music distributor that decides to launch a proprietary music streaming service to respond to changes in music consumption trends exhibits

Dynamic capabilities.

Strategic leaders are considered

Executives whose visions and decisions help their companies achieve competitive advantage

A good strategy is a set of actions that enables a firm to achieve its own internal goals without regard to the external environment. T/F

F

Firms within the same industry automatically belong to the same strategic group. T/F

F

Product-oriented vision statements are better suited than customer-oriented vision statements for helping companies to adapt to changes in the external environment. T/F

F

Strategic leaders spend the majority of their time working alone to devise new strategies. T/F

F

How do low interest rates affect a business?

Firms can easily borrow money to finance future growth.

A strategic group will typically include

Firms within the same industry.

Under the strategy as a planned emergence model, entry-level employees

Generate strategic initiatives.

What Questions are asked during the strategy analysis stage of the AFI framework.

How does the firm make money? What effects do external environment have on the firm's potential to gain and sustain a competitive advantage?

Managers must first develop a strategy that is likely to produce a competitive advantage before

Implementing a balanced scorecard approach.

Due to several black swan events in the past, the

Implicit trust relationship between the corporate world and society at large has deteriorated.

The core competencies of a firm are determined by

Interplay of its tangible resources and intangible capabilities.

Beats Electronics has been able to outperform Audio-Technica, Bose, JBL, Skullcandy, Sennheiser, and Sony in the high-end, premium headphone market. Which of the following statements accurately explains one of the main reasons for the success of Beats?

It created a perception that owning its products was cool.

What is a primary feature of the five forces model?

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

How do strong ethical values benefit a firm?

Keep the company on track when pursuing its mission.

Dynamic strategic activity systems help a firm to

Maintain a competitive advantage for extended periods of time.

The efficient market hypothesis suggests that the market price of a firm's stock is an objective indicator of a firm's

Past, current, and expected future performance.

A cost leader is the firm most likely to survive a

Price War

The major value drivers that managers have at their disposal include

Product features, customer service, and complements.

Marina manages the supply chain for a company that sells diamond watches. She learns that economists are predicting a moderate to severe recession in the next six to eight months. Based on that information, what action should Marina recommend to the company's owner?

Reduce supply.

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

Strategic management

Strategic thinking is different from strategic planning in that

Strategic thinking includes all types of information sources while strategic planning does not.

_____ is best described as a set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors.

Strategy

What method of developing a strategy best illustrates scenario planning?

Strategy that is able to handle small to medium to large increases in the prices of cotton in the future.

The resource-based view, a firm that differentiates itself from its competitors through its personalized approach to customer service is likely to

Sustain its competitive advantage for a long time.

A firm operating on a 70 percent learning curve will achieve lower per-unit costs after doubling its output than a firm operating on an 80 percent learning curve will. T/F

T

A video-streaming service provider such as Netflix is a complement to a manufacturer of streaming video devices such as Roku. T/F

T

Differentiators tend to score highly on most competitive elements on a strategy canvas, while cost leaders tend to hover near the bottom of the strategy canvas.

T

A firm's strategic position is likely to be strong when

The gap between the value the firm's product generates and the cost to produce it is large.

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

The general managers of individual business units

When fashion magazines face competition from fashion blogs on the web, which of the following forces in Michael Porter's five forces model primarily gets stronger?

The threat of substitutes

What is an assumption that top-down strategic planning rests on?

We can predict the future from the past.

In the top-down strategic planning approach, all strategic intelligence and decision making responsibilities rest primarily on the

chief executive officer

In the five forces model developed by Michael Porter, _____ is not defined narrowly as a firm's closest competitors but rather more broadly to include other factors in an industry like buyers, suppliers, potential new entry of other firms, and the threat of substitutes.

competition

A firm that achieves superior performance relative to other firms in the same industry or the industry average has a(n)

competitive advantage.

It is important for managers in oligopolistic firms to monitor and respond to changes their competitors make because

competitors in oligopolistic industries are interdependent

Strategic commitments are actions that are

costly, long-term oriented, and difficult to reverse.

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

demographic trends

In the pyramid of corporate social responsibility, _____ responsibilities are the foundational building block.

economic

Given the structure of the automobile industry, entering the auto manufacturing industry seemed risky. Yet Tesla Motors joined the fray. Rather than attempting to compete head-on with internal combustion engines, Tesla Motors entered the all-electric car segment, a much less crowded niche in the overall car industry. Which of the following is Tesla most hoping to benefit from in this market niche?

economies of scale

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

An employee lacking some of the innate abilities to be a top-level manager can still become an effective strategic leader through

hard work and experience.

A vision describes

inspirational terms what an organization hopes to accomplish in the future.

A company that owns failing movie theaters could

leverage existing assets by turning the buildings into performance spaces and conference sites

A small coffee shop faces significant potential competition because of

low capital requirements compared with business environments such as universities and laboratories. T/F

Three large firms dominate the telecommunication industry of United Canava: ADTelecom Inc., Mystic Telecom Corp., and Total Talk Inc. Instead of cutting prices competitively, these firms have resorted to non-price competition through branding and product differentiation. Which of the following industry competitive structures are these companies most likely in?

oligopoly

What strategies does Tesla need to implement or achieve to gain a competitive advantage?

reinvest profits to build successively better electric automobiles

A customer-oriented vision statement focuses employees to think about how best to

solve a problem for a consumer.

The former CEO of Sam's Club, a division with its own profit-and-loss responsibility, Rosalind Brewer, reported to Walmart's CEO, C. Douglas McMillon, who as corporate executive oversees Walmart's entire operations. Sam's Club, therefore, is a _____ of Walmart.

strategic business unit

What stage of the strategic management process involves an evaluation of a firm's external and internal environments?

strategy analysis

Through _____, a firm puts its guiding policy into practice by employing a set of coherent actions.

strategy implementation

When do employees fail to adopt the organizational values of a firm?

when the top managers in the firm are merely paying lip service to the firm's stated values

In the why, what, who, and how of business models framework, the why dimension asks

why does the business model create value