BUS 479
In the external analysis phase of the AFI strategy framework, managers should ask,
"How do external forces affect our strategy and competitive advantage?"
Which statement about strategies is true?
A statement of desire on its own often leads to goal conflict.
The Bright Bulb light bulb company produces a line of LED bulbs that customers consider very similar to competitors' LED bulbs. Which of the following conditions must be true for Bright Bulb to have a competitive advantage?
The bulbs must have a lower cost than competitors' bulbs.
Which of the following statements regarding tasks in the AFI strategy framework is true?
The tasks are very interdependent. Reason: Although they may be studied separately, they frequently happen at the same time.
In which of the following situations can a firm providing goods and services gain a competitive advantage?
Their offerings are of similar quality to competitors' offerings but can be sold at lower prices due to lower costs. Their offerings provide more value for consumers than competitors' offerings.
In the ______ step of the stakeholder impact analysis, the firm identifies the opportunities and threats that stakeholders present to the firm.
Third
Which of the following are aims of stakeholder strategy?
To manage various stakeholders effectively To gain and sustain competitive advantage
Firms should obey all the laws, including but not limited to labor, consumer protection, and the environment. True false question.
True
Which of the following questions are part of the five steps in stakeholder impact analysis?
What are our stakeholders' interests and claims? Who are our stakeholders? What opportunities and threats do our stakeholders present?
According to Michael Porter, the profit potential of an industry is ______.
a function of five forces related to competition
A stakeholder has ______ when its needs are within the bounds of the law or are otherwise relevant to the firm.
a legitimate claim
Which of the four corporate social responsibilities is considered first and foremost for business enterprises?
Economic
Production costs can increase when ______.
buyers demand higher quality and more service
True or false: Sociocultural factors tend to be fixed.
False
In the ______ step of a stakeholder impact analysis, firms identify those stakeholders that currently have, or potentially can have, a material effect on the company.
First
Stakeholder impact analysis is a _____-step process that allows managers to better understand and address stakeholders' needs.
Five
In the _____ step of the stakeholder impact analysis, firms identify their various social responsibilities to stakeholders.
Fourth
Which of the following statements about Airbnb is correct?
It handles more accommodations than the three biggest hotel chains combined.
Which of the following statements about legal factors as an external force is true?
Regulatory changes tend to affect entire industries at once.
Better Capsules is a highly successful vitamin manufacturer. At the close of its most recent fiscal year, the company's balance sheet showed cash holdings of $110 million. Which of the following actions will provide the most benefit for stakeholders?
Reinvest profits into expanding the company and creating more jobs.
The concept, or framework, of corporate social ___ guides firms in identifying and addressing their economic, legal, ethical, and philanthropic obligations to society.
Responsibility
In the ______ step of the stakeholder impact analysis the firm identifies their stakeholders' interests and claims according to the power, legitimacy, and urgency framework.
Second
Which of following practices of a firm satisfies its ethical responsibilities?
Selling vaccines at a subsidized price in a less developed country even though this results in reduced shareholder returns
Effective guiding policy is supported by and stays consistent through the use of ______.
Strategic Commitments
The field of management that focuses on attaining competitive advantage by combining analysis, formulation, and implementation is known as ______.
Strategic Management
Burger Bomb is a new hamburger restaurant. In order to compete successfully against its many competitors, Burger Bomb has decided to focus on quality and an interesting, unique menu that uses locally sourced, organic ingredients. This is known as Burger Bomb's ______.
Strategy
According to AFI strategy framework, in which of the following tasks of strategic management is a firm's vision, mission, and values identified?
Strategy Analysis
In a nutshell, strategy is the art and science of ______.
Success and Failure
The external forces called technological factors ______.
capture the application of knowledge to create new process and products
Contour Inc., a vendor, regularly supplies capacitors to All Purpose Electronics for use in its products. Therefore, Contour Inc. is All Purpose Electronics'
external stakeholder.
Green and Good Inc., a multinational company, relies on its media partner OmniSignal to regularly advertise its offers, sales, and new products. OmniSignal is invested in this relationship because it generates most of its revenue from advertising Green and Good's products. In this scenario, OmniSignal is Green and Good Inc.'s
external stakeholder.
In the PESTEL model, political factors are those that relate to ______.
government bodies
Which of the following topics should be considered during the analysis phase of the AFI framework?
the firm's internal strengths and resources the firm's business model and competitive advantages the external environment and associated challenges the role of strategic leadership and the strategy process
A competitive advantage that lasts for a long period of time is said to be ______.
sustainable
Which of the following was a key motivator for participants in the Occupy movement of 2011?
the issue of income disparity
What must a firm do after diagnosing its specific competitive challenge?
Create an effective guiding policy
A firm always has a competitive disadvantage when its return on invested capital is
below the industry average.
The economic factors that affect a firm's external environment are ______.
largely macroeconomic
An example of a recent innovation in process technology is ______.
lean manufacturing
Deregulation of industries leads to intensified competition and higher value at lower prices for consumers. This is an example of ______ factors influencing business.
legal
The minimum wage in the country of Hanns is $8 an hour. Delish, a restaurant in Hanns' capital city, pays its servers $8 per hour. However, the management of the restaurant feels that this amount is excessive for workers whose only job is to clear tables. By continuing to adhere to the rules set by the government of Hanns, which of the following responsibilities is Delish satisfying?
legal responsibilities
Sustainable competitive advantage exists when a firm ______
maintains superior performance relative to its industry over a long period of time
When managers understand the forces in the external environment, they are better able to ______.
mitigate threats and leverage opportunities
When a new firm enters an industry, which of the following often occur?
-Industry profit potential declines. -Incumbent firms lower prices. -Incumbent firms spend more to satisfy customers.
Michael Porter developed the five forces model to help firms do which of the following? (Check all that apply.)
-gain and sustain a competitive advantage -determine the profit potential of different industries
Which of the following are examples of economic factors in the firm's general environment? (Check all that apply.)
-growth rates -price stability -interest rates
Which of the following helped Airbnb develop a successful business in the peer-to-peer rental space?
-presenting a well-designed website -fortuitous timing that led to growing demand -developing a smooth transaction between hosts and guests
Which of the following are examples of sociocultural factors?
-the growth of the Hispanic population -an increased demand by consumers for gluten-free products
Industrial Drills, a company that manufactures industrial tools, incurs higher costs because of its refusal to outsource its manufacturing to countries where labor costs are lower. This reflects Industrial Drills' ________ responsibility.
Ethical
A statement such as, "We will be the biggest company in the world," is an example of strategy. True false question.
False
Good Ole Cinemas Inc. and HD Inc. are two companies that own and run movie theaters in malls and other commercial areas. While Good Ole Cinemas Inc. pursues a cost-leadership strategy, HD Inc. adopts a differentiation strategy. Which of the following statements is most likely true of this scenario?
HD and Good Ole Cinemas will not be direct competitors to each other, and their customer segments will overlap very little.
As the strategic manager of ShRPer Scissors, you are tasked with producing a strategy for introducing a new line of premium scissors. Your competitor produces a line of similar scissors at a cost of $1 and sells them for $12. Because your company has inferior production capabilities, your scissors will cost $3 each to produce. However, your handle is proven to be more comfortable than your competitors'. Assuming you are guaranteed to sell the same number of units as your competitor, which of the following strategies is most likely to achieve a competitive advantage?
Market ShRPer scissors as a higher-quality alternative and sell them for $15.
oy sales have declined by 10 percent each year, forcing many retailers to exit the industry. To eliminate its remaining competition, Bargain Toys sells all of its product at a loss and relies on its significant cash holdings to cover costs until its competition is forced to exit the industry. Is this an example of a successful strategy? Why or why not?
No. Bargain's strategy and competitive advantage are unsustainable.
The overall purpose of a firm's strategy is to ______.
Perform better than other companies in the same industry
______ factors result from the processes and actions of government bodies that influence the decisions and behavior of firms.
Political
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.
largely macroeconomicWhich of the following are examples of sociocultural factors?
The growth of the Hispanic population An increased demand by consumers for gluten-free products
In order to determine if Home Depot has a competitive advantage, we must compare Home Depot's performance to ______.
The performance of other firms in its industry
When a stakeholder has power over a company it is ______.
able to influence the company to do something it would otherwise not do
To which types of organizations can we apply the principles of strategic management?
all types of organizations
Global warming would be an example of ______ factor in a firm's external environment.
an ecological
A group of companies that deal with more or less the same set of suppliers and buyers make up ______.
an industry
What is the first step in the AFI strategy framework?
analysis
Which of the following elements comprise strategic management?
analysis, implementation, formilation
The pressures that industry suppliers can exert on an industry's profit potential, is also called the ______.
bargaining power of suppliers
If Modern Furniture LLC 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
When a firm implements a strategy that leads to superior performance relative to other companies in the same industry, it is said to have achieved ______.
competitive advantage
Underperformance relative to other firms in the same industry or the industry average results in a(n) ________ for a firm.
competitive disadvantage
Which of the following legal developments allow business to function as an institution?
contract enforcement property rights
Which of the following are primary strategy objectives?
controlling costs, creating value
Which framework helps firms to identify their economic, legal, ethical, and philanthropic obligations to society?
corporate social responsibility
Most consumers and investors today want the firms they do business with to look beyond just the profit motive. In fact, they want firms that behave legally and ethically while also giving back to their communities via philanthropic activities. The framework that attempts to reconcile these wants is known as
corporate social responsibility.
While creating its AFI strategy framework, Gordon's Consultants decided what markets the firm should compete in. By doing this, what type of strategy did the company devise?
corporate strategy
When identifying stakeholders, a firm should focus on those stakeholders that ______.
currently have, or could potentially have, a material effect on the firm
In the final step of the stakeholder impact analysis, a firm
decides a course of action to address the stakeholders' concerns.
What are the categories of expectations that society has of the business enterprise as described in the CSR framework?
economic legal ethical philanthropic
The expectations that society has toward business, in contrast to what society requires, result in which of the following elements of the pyramid of corporate social responsibility?
ethical responsibilities philanthropic responsibilities
In the AFI strategy framework, strategy analysis primarily involves
evaluating the effects of internal resources and core competencies on a firm's potential to gain and sustain a competitive advantage.
The stakeholders of a firm are ______.
individuals or groups that can affect and are affected by the actions of the firm
An industry analysis provides which of the following?
insight into a firm's strategic position within an industry a rigorous way of identifying the industry's profit potential the level of profitability that can be expected for the average firm in the industry
The relationship between the natural environment and business organizations can best be described as ______.
interdependent
In the second step of the stakeholder impact analysis, managers need to identify and understand stakeholders' ______.
interests and claims
A competitive advantage _____.
is assessed relative to other competitors in the industry
The third step of stakeholder impact analysis requires managers to identify the ______ presented by internal and external stakeholders.
opportunities and threats
Match the element of the pyramid of corporate social responsibility (on the left) with its explanation (on the right). Instructions
philanthropic responsibilities-corporate citizenship ethical responsibilities-do what is right, just, and fair legal responsibilities-laws and regulations are society's codified ethics; define minimum acceptable standard economic responsibilities- gain and sustain competitive advantage
Among the various types of responsibilities a business firm has, which are specifically considered to be economic responsibilities?
repaying debts to creditors giving investors a return on invested capital
Which of the following is a tool that managers can use to address the needs of stakeholders while maintaining a competitive advantage?
stakeholder impact analysis
A firm's attempts to manage the web of relationships between internal and external stakeholders in order to create value is known as ______.
stakeholder strategy
The groups or individuals who can impact or be impacted by a firm's actions are known as ______.
stakeholders
________ is best described as an integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage.
strategic management
Andrew's Home Center has created a unique situation for itself in its industry that allows the company to not only provide excellent value to its customers but also control its costs. This is known as ______.
strategic positioning
BuyNow Inc. is an e-commerce retail firm that sells a variety of merchandise online. Through services like cash on delivery, easy return, and online tracking, the company has created more customer value than its competitors (brick-and-mortar businesses) at the same price. Also, the company's costs are substantially lower than its competitors because of minimal investments in operation and administration. In this scenario, BuyNow Inc. has most likely been able to provide superior value and cost control through
strategic positioning.
Which of the following stages of the strategic management process involves an evaluation of a firm's external and internal environments?
strategy analysis
Which of the following stages in the AFI strategy framework involves designing a business, corporate, and global strategy?
strategy formulation
The threat of ______ is one of the five forces and can be exemplified by the threat that videoconferencing presents to business travel.
substitutes
strategy is ___
the set of actions a firm takes to achieve a competitive advantage
Managers are able to influence which of the following types of external forces?
the structure of their industry strategic group composition
The risk that potential competitors will enter the industry is known as the ______.
threat of entry
Which of the following are the three important stakeholder attributes managers must pay particular attention to during stakeholder impact analysis?
urgency power legitimacy
Place the five steps of the stakeholder impact analysis in order, with the first step at the top. Instructions
who are our stakeholders what are our stakeholders intersts what opportuities and threats do our stakeholders present what economic, legal, ethical and philanthropic responsibilities do we have to our stakeholders what should we do to effectively address the stakeholder concerns?