B AD Final Ch 2-5, 10
Which of these strategies represents a company that has selected a differentiation strategy? a. A grocery store chain that is converting their local neighborhood stores to warehouses. The chain eliminates shopping in the aisles and instead has customers select items online or through an app. The customer can then pick up their items in a drive through without having to leave their vehicles. b. A company that 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 that is investing in 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
As a company works to build relationships with its customers, its leaders must determine which customer needs they will seek to satisfy. The company's leaders must also recognize that customer needs change over time. What might these leaders focus on to ensure they anticipate customers' changing needs? a. Monitoring customer trends in the industry and of consumers as a whole b. Utilizing the guidance of the Board of Directors to communicate the customers' needs c. Producing the same products and services that have been successful in the past d. Creating market segmentation to select a smaller group of customers to serve
a
As part of its selection of a business-level strategy, a firm will decide which customers it will serve and what goods or services it will use to satisfy customers' needs. It must determine: 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.
a
General Electric, 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 on how to act to gain a competitive advantage. What is GE performing? a. Competitor analysis b. Industry analysis c. External environment analysis d. General analysis
a
Identifying internal strengths and weaknesses is important because: a. strategies are more successful when they are aligned with a company's resources, capabilities, and core competencies. b. company Boards of Directors are required to submit documentation to the SEC for publicly traded companies. c. it is impossible to select strategies to implement without first having completed an internal analysis. d. these are more important than understanding external threats and opportunities.
a
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 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.
a
P&G is a consumer products company that is consistently implementing scanning systems of the environment. They want 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. What could be the reason for P&G's competitiveness? a. P&G's ability to take 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
a
Research indicates that a competitive advantage in logistics is a primary strategy that creates the most value for a cost leadership strategy. Choose which of these value-creating activities should be a focus for a company pursuing a cost leadership strategy. a. Supply chain b. Human resources c. Marketing d. Customer service
a
Strategic groups exist because: a. companies within the same industry may position themselves differently regarding distribution channels, market segments, and other differentiators. This 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.
a
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.
a
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 set by the manufacturer to be sold in a retail environment. c. the inputs required to produce a product, including human, physical and financial capital. d. the amount of investment required to achieve a competitive advantage.
a
What is a competitor analysis? a. An analysis of companies in 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 report of a competitor
a
What is the term that would describe the relationship between Apple, the leading cellphone manufacturer and applications provider, and King, the developers behind the Candy Crush app? a. Complementors b. Competitors c. King is a supplier to Apple d. Apple is a customer of King
a
Which of these represents a risk for companies pursuing a differentiation strategy? a. Buyers choosing to purchase lower priced products during a recession 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
a
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 to gain an advantage by exploiting core competencies. c. the actions a 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 a company sells its goods and services outside of its domestic market.
b
A capability is nonsubstitutable when: a. competitors can't clearly understand how a firm uses its capabilities as the foundation for competitive advantage. b. it does not have strategic equivalents. c. rival firms do not have the same capability. d. it allows firms to exploit opportunities.
b
The country's largest landscape company is the result of a merger between two multi-state firms, Brickman Group and ValleyCrest. Now called BrightView, the $2 billion firm was created in 2015. The company is operating in a fragmented industry dominated by small, local businesses. Which of the following identifies a relevant competitive force and a way the company might leverage it? a. Bargaining Power of Buyers: BrightView can expect customers to purchase from them because of brand loyalty b. Risk of Entry by Potential Competitors: BrightView may be able to lessen the impact of this force in a low-barrier industry through economies of scale, specifically discounts on bulk purchases of raw material inputs c. Bargaining Power of Suppliers: BrightView will have difficulty leaving the landscape industry because of its investment in this merger and the cost of all of the landscape equipment included among both companies' assets d. Complementors: BrightView will need to collaborate with other companies to develop outdoor products because there are not enough complementary products in the marketplace to make homeowners value their landscaping
b
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 focused strategy developed through market segmentation. d. the external communication of the strategy to a company's customers.
b
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 these strategies would be most beneficial for the company to pursue and would best be aligned with the firm's internal analysis? a. Differentiation strategy b. Cost leadership strategy c. Focused differentiation strategy d. Integrated cost leadership/differentiation strategy
b
What are the possible repercussions of a company that performs unethically in order to receive competitive intelligence to gain an advantage? a. Significant prison sentence b. Possible jail time or fines, but not always c. No threat of legal action, as unethical actions are not necessarily illegal d. No threat as unethical actions will be kept secret
b
Fast-cycle markets are markets in which the firms' capabilities that contribute to competitive advantages aren't shielded from imitation and where imitation is often __________. a. slow and inexpensive b. rapid and inexpensive c. rapid and expensive d. slow and expensive
b
Firms operating in the same market, offering similar products, and targeting similar customers are: a. allies. b. competitors. c. multimarket competitors. d. market commonality.
b
Market segmentation is a part of all business-level strategies and is used to determine which customers to serve. This is most critical for which business-level strategies? a. Broad segment and integrated cost leadership/differentiation strategies b. Focused differentiation and focused cost leadership strategies c. Cost leadership and focused cost leadership strategies d. Differentiation and focused differentiation strategies
b
Often a company's business-level strategy can be easily identified by reviewing its marketing materials. Consider the marketing slogans of the following companies and identify which one is pursuing a business-level strategy of differentiation. a. Walmart - Save Money. Live Better. b. HBO - It's not TV, It's HBO c. Days Inn - The Best Value Under the Sun d. Payless Shoesource - Everybody Loves to Payless
b
One example of a tangible resource might be a: a. pharmaceutical company's team of research and development scientists. b. network of distribution centers in strategic locations around the world. c. secret recipe for a restaurant. d. process for moving raw materials more quickly through the plant.
b
Outsourcing is: a. the decision to manufacture in a foreign country, at a facility owned by the company, because it offers lower wages. b. the purchase of a value-creating activity or support function activity from an external supplier. c. when a company chooses to pay less for a value-creating activity through a supplier. d. the decision by a company to purchase a supplier's company, bringing its capabilities into the company.
b
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 who produce similar components at similar quality.
b
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 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 due to increased wage pressure from the workers specializing in casting. With these issues, TaylorTech has to make a decision. Which is the most viable option for TaylorTech to increase its margins? a. Layoffs of team members across the company b. Outsourcing of the casting process c. Stop offering the polishing process d. Hire less skilled workers
b
What is an advantage of being a 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.
b
What is the set of factors that directly influences a firm and its competitive actions and responses within the industry? a. Internal environment b. not all strategies will work for all firms; successful strategies must be aligned with a company's strengths. c. Political environment d. Competitor environment
b
What is the term that is concerned with a population's size, age structure, geographic distribution, ethnic mix, and income distribution? a. Economic segment b. Demographic segment c. Political/legal segment d. Sociocultural segment
b
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 history and brand c. A manufacturing facility d. The CEO
b
Which of the following is not a concern of a competitive 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 their 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
b
Which of these might be a definition for 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
b
Which of these 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
b
A CEO is in an argument with his Board of Directors over the direction of the software company he is leading. The CEO wants to branch out and take advantage of its competencies and capabilities to pursue opportunities enabled by new technology that are forecasted to be very profitable. But, these activities are not what the company is used to, and it would have to develop hardware alongside its specialty in software. The Board is arguing that the company is a software company and should remain a software company. What concept must the CEO overcome? a. Strategic flexibility b. Core capabilities c. Core rigidity d. Resources
c
A capability can be considered costly to imitate when: a. it requires an investment of half of the company's financial assets. b. other companies possess the same capability. c. it is developed because of unique historical conditions. d. there are costs associated with purchasing it, as in outsourcing.
c
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, how might this core competency become a core rigidity? a. If the company starts to target smaller businesses with its bundle of capabilities b. If the company chooses to shift its focus to large-scale enterprises to offer its products and services c. If the company doesn't keep up with advances in technology and customers begin to expect greater value from the technology d. If the cost of hardware rises it would increase the company's costs of production
c
A hospital system operates 22 physicians' offices, 5 skilled nursing facilities, and 2 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 these 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
c
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 gain new experience and knowledge into the firm.
c
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 if it is 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.
c
About six months ago, a mid-sized manufacturer of athletic shoes decided to pursue an integrated cost leadership and differentiation strategy. The company reduced its internal costs by consolidating the number of colors and variations it offers to customers. At the same time, the R&D team added a patented sole to all of its shoes. Which of these 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 kid'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, however, 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 material cost for our soles. Even comparing against other suppliers, we simply can't get a better price at the volumes that we're purchasing.
c
An apparel company is considering a change in its business-level strategy. The company has been making premium T-shirts known for their catchy slogans aimed at millennial customers. It wants to expand operations to include multiple casual clothing lines that will appeal across generations. The Board of Directors wants to clearly understand the risks of moving forward with this change. Which of these would be a risk for the firm's new strategy? a. Lack of suppliers to provide enough raw goods to fulfill orders for a broader market b. Social trends away from casual clothing and toward more formal attire c. Customers not placing enough value on the product to warrant premium prices d. Inability to pay workers enough to attract them to work for the company
c
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 with expertise in these projects. d. selling the building to its customers for them to use for their projects.
c
An intangible resource is one that: a. is based on optimism and planning; they are resources the company is in the process of establishing. b. is created to fill a void in the company so that it might more easily compete with its rivals. c. is rooted deeply in the company history, is gathered over time, and is difficult for competitors to analyze or imitate. d. a service a company provides to satisfy customers' needs.
c
As an industry environment evolves over time the: a. industry becomes more profitable. b. strategic groups become less attractive to new entrants. c. the strength of the competitive forces in the industry change. d. the number of companies is reduced and it becomes more consolidated.
c
By introducing Android 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. competitor analysis.
c
Capabilities are: a. the advanced degrees that are held by members of the senior leadership team. b. the physical attributes of the company, including its buildings, machinery, and other assets. c. the combination of tangible and intangible resources to complete the organizational tasks required to produce, distribute and service the goods or services for customers. d. the human capital, through knowledge and experience, applied to producing products.
c
Companies must effectively manage their relationships with customers because: a. they are the only stakeholders that matter. b. their rivals are managing customer relationships. c. they must satisfy customers' needs to achieve a competitive advantage. d. it's the most effective use of their core competencies.
c
Cost leadership strategies can be attractive to companies looking to address the competitive forces of rivalry with existing competitors because: a. it is easier to cut costs than it is to generate greater differentiation among products or services. b. brand loyalty is a byproduct of this strategy, leading customers to choose the company's product over its rivals' products. c. rivals are hesitant to slash their own prices, and often their profitability, to compete with a low cost leader. d. rivals are forced to compete using substitute products, rather than with their core offering.
c
In 2011, Apple and Samsung were in a legal battle over patenting. Apple and Samsung were mutually accusing each other of infringing on intellectual property and each took action legally. Why would both parties want to spend the time and resources to reclaim their intellectual property? a. To ruin the reputation of the other company b. To distract the competition and hopefully gain a competitive edge in the meantime c. To neutralize a threat that will hinder strategic competitiveness d. To receive compensation as both companies were struggling financially
c
In a focused strategy: a. A company focuses on a broad, integrated group of customers. b. A company produces goods or services with features that are acceptable to customers at the lowest cost. c. a company selects a more narrow group, or niche, of customers on which to concentrate its efforts. d. A company produces goods or services that customers perceive as being different in ways that are important to them.
c
Many large corporations have a presence in Washington in the form of lobbyists. These individuals attempt to have their voice, and the voice of the company they represent, heard. If there is a potential advantage to be had due to new legislation or implementation/abolition of laws and rules, it is the lobbyists' duty to ensure it is in their company's favor. Which segment is this process referring to? a. Governmental segment b. Political/legal segment c. Economic segment d. Sociocultural segment
B
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 was quickly gaining ground, Facebook. Myspace was quickly made obsolete because of Facebook's superior functionality, design, and features. What 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 inexpensive to start a social networking site d. Intangible resources were unavailable to the company
c
Potential competitors may enter an industry and begin to take market share from existing companies. What would be one of the largest challenges a new entrant would need to overcome to be successful when entering an industry? a. Very few customers are currently buying a product b. Several powerful retailers provide the only access to customers c. Production costs are high and require high volumes to achieve profitability d. Lack of products that go along with the product
c
The five competitive forces includes all of the following forces that shape competition within an industry except: a. risk of entry by a potential competitor. b. power of suppliers. c. rate of innovation and change. d. substitutes to an industry's products.
c
Through research and development, 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 they 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
c
What is a set of competitive firms emphasizing similar strategic dimensions and using a similar strategy? a. Collusion group b. Business partners c. Strategic group d. Complementors
c
When pursuing a business-level strategy, sometimes a company is unable to fulfill elements of the strategy because it has a split focus, resulting in a strategy that fails to satisfy customers' needs. This is a major risk of which business-level strategy? a. Focused cost leadership strategy b. Differentiation strategy c. Integration cost leadership/differentiation strategy d. Focused differentiation strategy
c
You are hired as strategic analyst for a Fortune 500 company. Your first task is to develop a competitive intelligence report to find key insights on the rivals' latest actions, current capabilities, and potential future actions. Being new to this type of report and the ethical protocols, what should be your first action? a. Calling the competitors' CEO for an interview b. Infiltrate the competitors' headquarters and plant devices to receive information c. Contact Strategy and Competitive Intelligence Professionals d. Analyze the publically released financial records from 6 months ago
c
A retail company feels that it has a mixed identity. Some of the leadership is focused on promoting the company as offering the highest quality, and other leaders argue they should be lowering prices to attract customers. The team is working through a strategic management process and determines that it needs better definition for the way it will compete against its rivals within the same industry and product category. This company needs to formulate and implement a(n): a. value chain strategy b. human resources strategy c. organizational strategy d. business-level strategy
d
A strategic response to engaging in competitive rivalry is called a: a. competitive response. b. strategic action. c. tactical action. d. competitive action.
d
An industrial tool manufacturer relies on a particular distributor network. This distributor network has the largest online outlet and store network, and its product lines are aimed at construction workers. The distributor network is seeking a manufacturer to provide it with private label products, as it has decided to offer only its own product line in this category of industrial tools. Now, the industrial tool company must decide whether to agree to this proposition or lose this network as a customer. This is an example of which of the competitive forces at play in this industry? a. Industry competitive structure b. Rivalry among established companies c. Bargaining power of suppliers d. Bargaining power of buyers
d
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 Five Forces of Competition. Which of these situations should the firm prioritize? a. Dealing with new entrants b. Bargaining power of suppliers c. Bargaining power of buyers d. Industry rivalry
d
Apple quickly launches their next wave of innovative iPhones in order to keep up with competitors like Samsung and Microsoft. Imitation is rapid and inexpensive in the smartphone industry. Apple is a part of what kind of market? a. Standard-cycle market b. Slow-cycle market c. Medium-cycle market d. Fast-cycle market
d
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. What tool did Apple use to determine its competitive advantage? a. External analysis b. Competitive analysis c. Industry analysis d. Internal analysis
d
Awareness affects the extent to which the firm understands the consequences of its: a. market commonality and resource similarity. b. competitive rivalry and dynamics. c. competitive motivation and ability. d. competitive actions and responses
d
Blackberry, a one-time leader in secure cellphones, has lost its edge. Without significant upgrades or innovation, the company quickly lost marketshare to iPhones and Android devices. When attempting to imitate these advances with the Blackberry Storm product, it flopped. Blackberry was criticized as trying to leverage capabilities beyond its core competencies. What tool should Blackberry use to regain a scope of their core competencies and determine potential sources of competitive advantage? a. External analysis b. Competitive analysis c. Strategy analysis d. Value chain analysis
d
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.
d
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 analysis element is a primary focus of car manufacturers? a. Scanning b. Monitoring c. Forecasting d. Assessing
d
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 provided 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
d
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.
d
Firms should study their internal organization as part of the strategic management process because: a. they are required to report their 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 a firm can do, with what a firm might do when formulating strategies.
d
If a start-up 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.
d
In an external analysis, there are two important elements that need to be identified. What are those two elements? a. Strengths and weaknesses b. Threats and strengths c. Opportunities and weaknesses d. Opportunities and threats
d
In the toy industry, Mattel is one of the world leaders, especially with their line of Barbie dolls. However, it has faced competition from MGA Entertainment, who has produced Bratz dolls since the 1990s. Which of these statements is true about the strategic group in which these companies compete? a. The two companies occupy different strategic groups and will likely have very different competitive forces and different strategies. b. The companies are dealing with the same competitive forces as all the other companies in the toy industry. c. Since they are both toy companies, they both have the ability to quickly pursue the toy truck market with minimal investment. d. By competing in the same strategic group, the two companies are dealing with customers who view their products as direct substitutes for each other.
d
What is the most likely outcome for a company if the executives never analyze a competitor's possible reaction to competitive actions the firm takes? a. The company will most likely fail because the competitor might neutralize their competitive advantage. b. The company will most likely fail due to unlawful actions that it was unaware of. c. The company will still succeed, as long as they have an efficient corporate structure. d. The company will still succeed if they have effective marketing.
A
An internal analysis is important because: a. it compares companies against their competitors so that they can copy competitors' successful strategies. b. not all strategies will work for all firms; successful strategies must be aligned with a company's strengths. c. the business environment is always changing, and the analysis provides insights about the future. d. company leaders do not have a good understanding of how their firms operate internally.
b
A company is analyzing its value chain to discover its value-creating activities. While formulating its strategy, the firm will: a. consider the operational functions 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 activities as a source of competitive advantage.
a
A company is debating on entering 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 into a new market or industry? a. If the barrier for entry is low, and suppliers and buyers have strong bargaining power, the venture will most likely fail. b. If the barrier for entry is high, and suppliers and buyers have low power, the venture will most likely fail. c. If the barrier for entry is low, and suppliers and buyers have high power, the venture will most likely succeed. d. If the barrier for entry is high, and suppliers and buyers have high power, the venture will most likely succeed.
a
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.
a
A core rigidity is: a. when a resource becomes an obstacle, generating inertia and stifling innovation, often because of conditions in the external environment. b. when a corporation refuses to change its strategies without an action by the Board. c. when a company puts all of its strategic decisions up for a vote by the company employees. d. when a firm is led by a CEO with a rigid sense of mission that cannot be swayed.
a
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.
a
An integrated cost leadership/differentiation strategy is able to address the competitive forces because: a. the strategy, when executed effectively, offers the strengths of both the cost leadership strategy and the differentiation strategy. b. all business-level strategies offer strengths to address all of the competitive forces. c. the strategy has no weaknesses and is inherently a better strategy than the other business-level strategy options for a company. d. it relies on market segmentation to address a specific niche of customers.
a
A company is working through its strategic management process to develop a long-term strategic plan that will help it to achieve a competitive advantage. The company's leaders have completed the work of developing a mission, a vision, and core values. They have also researched and conducted a thorough SWOT analysis identifying general, industry, and competitor environments, as well as internal resources, capabilities, and core competencies. As they determine the business-level strategy they will pursue for their core business unit, which of these steps would they take? a. Outline a tactical plan for each department detailing how the team will create value in the value chain, identifying individuals who will be responsible, and setting product pricing based on these anticipated contributions b. Determine if the company will compete by reducing the cost structure or by focusing on generating greater perceived value by its customers - or both - based on conclusions reached in the research and decisions up to this point c. Research the countries and regions of the world in which the company will operate and identify the macroenvironment factors that are at play in those places to identify opportunities for international sales d. Consider additional business units for the company to explore and invest in, including businesses that could be served by the company's existing core competencies, as well as businesses that would require building new resources
b
A company president for a software firm has chosen to implement a differentiation strategy, offering his product in a Software as a Service (SaaS) platform with a monthly subscription. Most of his competitors are selling their products as a one-time purchase. Which of these represents the greatest risk to the strategy? a. There's a shortage of technical workers to maintain the software platform, causing HR to increase wages to attract quality employees. b. An established competitor has announced it will begin offering its programs in an 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 company in this software market is slashing its prices to below your annual rate.
b
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 these 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 raised 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.
b
A cost leadership strategy is one in which: a. customers perceive a company's products to be superior to competitor products. b. companies use process innovations, such as advanced production or distribution methods, to operate efficiently. c. a firm produces non-standardized 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.
b
A differentiation strategy is one in which: a. firms concentrate on ways to reduce cost as their primary focus. b. firms create products that have features customers value and are willing to pay a higher price for. c. a company has core competencies in production and distribution efficiencies to reduce required inputs. d. A company divides its customers into clusters of people with similar needs.
b
A lawyer has grown his law firm, gaining new clients in two diverse areas - estate law and immigration law. He's not sure which specialty will become his focus in the long run. At the same time, he believes he has enough work to support hiring a paralegal. However, he is having trouble hiring a paralegal who can manage both types of clients. He was able to find a freelance paralegal referral service that connects lawyers to paralegals who have experience in a variety of specialties. He might consider outsourcing through the referral service because: a. it is less expensive than hiring a full-time paralegal. b. it provides him with the flexibility to gain capabilities to serve both types of clients without making a long-term investment. c. outsourced capabilities provide greater value to customers and are superior to internal capabilities. d. he has a friend that works for the paralegal referral business, and she will earn a bonus if he uses the service.
b
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 who 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 these represents a weakness for the nonprofit organization? a. Fundraising b. Human Resources c. Distribution d. Customer Service
b
A pharmaceutical company has a patented antidepressant that has few side effects, and has dominated the market. The company has slowly been conducting research and development to improve this drug. The slow nature of drug development categorizes the pharmaceutical company as part of a: a. fast-cycle market. b. slow-cycle market. c. standard-cycle market. d. no-cycle market.
b
A telecommunications company is impacted by government regulations of the wireless spectrum, cell tower locations, and internet accessibility. The company decides to hire a lobbying firm to represent its interests with the U.S. government, specifically the FCC, FTC, and Congress. This is an example of a company managing which forces in the macroenvironment? a. Social forces b. Political and legal forces c. Technological forces d. Global forces
b
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 these represents a risk to the company because Michelle is using a focused strategy rather than a broad strategy? a. Competitor residential heating and cooling companies offer mainstream options at lower prices than Michelle's company is offering geothermal solutions. b. The cost of geothermal technology comes down and it is 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.
d
Prioritize the three drivers of competitive action ranking their importance from least to most important. a. Ability, motivation, awareness b. Awareness, ability, motivation c. Ability, awareness, motivation d. Awareness, motivation, ability
d
The executive leadership team of a large corporation is analyzing a report. The report's contents have information that can be used to better understand and anticipate a competitor's objectives, strategies, assumptions, and capabilities. What is the term for the report being analyzed? a. External analysis b. Internal analysis c. SWOT analysis d. Competitor intelligence
d
The term "white space" has become a very popular term over the last few years. This term describes a space in the competitive landscape that competitors are not occupying. Pricing, quality, and distribution channels are examples of what may be plotted along strategic dimensions to determine points of parity and points of difference. As a company, do you want to be in the "white space"? a. Yes, as you will be easily identifiable from the competition as having vastly different capabilities. b. No, as the void in that space mostly likely is due to a disadvantage. c. No, as you will not be associated with the competition. d. Possibly, as the "white space" could be a place that is competitive but was neglected. It could also be a space that is not competitive or profitable.
d
Which of the following would be deemed as unethical when developing competitor intelligence? a. Analyzing competitors' financial reports b. Attending trade shows solely to obtain knowledge of their 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
d
Which of these represents a risk for companies pursuing a cost leadership strategy? a. Buyers choosing to purchase lower priced products during a recession 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
d
Which of these 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 your product b. Offer a customer loyalty program with multiple fine print requirements c. Announce a baby products sale through a mailed postcard to your entire database of customers d. Provide email updates on shipping status and satisfaction surveys following the arrival of a produce
d
