BUS3-198 Strategic Management Midterm Review (Quizzes #1-7)

(Quiz #5) Cartzy Inc., Cartific Inc., and Clustercart Inc., are three consumer-product retailing companies. Their products consist primarily of day-to-day items that are easy to imitate and sell. All three companies use the same resources and capabilities in the production and distribution of their products. Judging from the market conditions described in this scenario, which of the following statements is true?

Any advantage that one firm has will be short-lived.

(Quiz #1) Which of the following scenarios illustrates a firm that has a sustainable competitive advantage?

Bill and Ted Corp. was able to hold its market share of 68 percent in the social networking industry for more than three years.

(Quiz #4) While implementing strategic group mapping for the U.S. domestic airline industry, two strategic groups become apparent: low-cost, point-to-point airlines (Virgin Atlantic, Alaska Airlines, JetBlue, and Southwest Airlines) versus differentiated airlines using a hub-and-spoke system (American, Delta, and United). Which of the following statements is true about these two strategic groups?

Competitive rivalry between Virgin Atlantic and JetBlue is likely to be higher than that between American and Southwest Airlines.

(Quiz #2) What is a product oriented vision statement?

Defining a business in terms of a goods or services provided

(Quiz #5) What is the question Ethan Brown, founder and CEO of Beyond Meat, asked himself as a young adult which led to Beyond Meat?

Do we need animals to produce meat?

(Quiz #1) ABC Tire Company makes a 10% profit margin, while XYZ Tire Company makes a 12% profit margin. Since ABC is profitable, we can conclude that it has a competitive advantage in the industry.

False—competitive advantage is only achieved by generating above average returns, relative to competition.

(Quiz #2) What has Facebook's (called Meta since 2021) main strategy been since its founding?

Gaining market share quickly.

(Quiz #2) First Pharma Inc. and GeoVax Inc. are two competing firms in the pharmaceutical industry. While First Pharma Inc.'s vision is "to be a preeminent drug manufacturer in the industry," GeoVax Inc.'s vision is "to make good health a reality for everyone around the world." Which of the following is an implication of these different visions?

GeoVax Inc. will be more flexible than First Pharma Inc. when adapting to changing environments.

(Quiz #2) Organizational values help people make choices that are ethical and company-goal-oriented. These values answer which strategic management questions

How do we accomplish our goals in the organization?

(Quiz #4) Which of the following statements accurately brings out the difference between monopolistic competition and an oligopoly?

In monopolistic competition, many firms compete against each other; in an oligopoly, there are few large firms competing against each other.

(Quiz #4) During the pandemic which of the following is an action that Airbnb DID NOT take?

It closed operations for several months

(Quiz #1) How has YouTube tried to compete with TikTok?

It introduced YouTube Shorts

(Quiz #5) 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.

(Quiz #1) What is an example of the evolving use of TikTok in the US?

It is used as a search tool.

(Quiz #4) At the start of the pandemic, what did Airbnb do?

It refocused on the core business of home rentals

(Quiz #3) What was the state of the music industry business in 2008?

It was collapsing due to widespread piracy in which consumers expected music to be free.

(Quiz #1) A reason US advertisers are interested in TikTok is

Its ability to reach young US consumers.

(Quiz #5) Many restaurants such as _____ offer Beyond Meat products in their menus.

KFC

(Quiz #2) 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.

(Quiz #3) An oligopolistic industry is

One with a few large firms with differentiated products, high barriers to entry and some degree of pricing power.

(Quiz #2) Who was one of the first investors in Facebook?

Peter Thiel

(Quiz #1) Which of the following is not an important stakeholder attribute?

Profession

(Quiz #2) Which of the following is NOT a business that Meta has acquired?

Snapchat

(Quiz #3) Keeping in mind the five forces in the airline industry, which of the following best explains the difficulty airlines have in generating a profit?

Substitutes are readily available in the form of trains, buses, and cars, thus reducing the profit potential in the industry.

(Quiz #4) In which of the following situations is the power of suppliers high in an industry?

Suppliers' industry is more concentrated than the industry it sells to.

(Quiz #4) Hank runs a company that manufactures satellites for commercial and government use. It has few rivals. At the moment, the power of buyers, the power of suppliers, and the threat of substitutes are all low. Based on this information, what can Hank conclude?

The company is likely to be very profitable as long as the threat to entry is low.

(Quiz #3) What are firm effects on a company's performance?

The impact of a manager's actions to the success of the company.

(Quiz #3) What are industry effects on a company's performance?

The impact of external circumstances on the success of a company.

(Quiz #4) While Sesmic Inc. operates in a monopolistically competitive industry, Energy 4 All Inc. operates in a monopoly. Keeping this information in mind, which of the following statements is most likely true?

The threat of new entrants will be higher for Sesmic than for Energy 4 All.

(Quiz #4) Years ago, the travel industry was controlled by a few large travel companies that booked holidays, air tickets, bus tickets, and hotels for their customers. However, with the emergence of the internet, smaller travel agencies started mushrooming in the industry and customers started making their own reservations. Which of the following can be inferred from this information?

The travel industry changed from a consolidated structure to a fragmented one.

(Quiz #3) What is the network effect?

The value of a product or service increases with the number of users.

(Quiz #1) Who are all of a company's stakeholders and why are they important to a company's strategy?

They are individuals or groups who have an interest in the performance of the company and can materially affect the success of the company

(Quiz #1) Which of the following statements is most accurate?

TikTok advertising revenue has grown quickly taking away share from YouTube.

(Quiz #3) What is the purpose of a Five Forces analysis?

To assess the degree of power a company has within an industry to create a competitive advantage and be profitable

(Quiz #4) What is Airbnb's mission?

To create a world where anyone can belong anywhere.

(Quiz #1) Which of the following is not the role of strategy in a firm's quest for competitive advantage?

To generate financing options for the purchase of capital equipment

(Quiz #2) What is Facebook's mission?

To give people the power to build community and bring the world closer together.

(Quiz #3) What is the purpose of a PESTEL analysis?

To identify issues and future trends in the wider world which have, or can have, an impact on a company's success

(Quiz #2) Which of the following is an example of a customer oriented vision statement?

To nourish and delight everyone we serve

(Quiz #3) Spotify was first conceived as

a free, ad supported service.

(Quiz #4) Wheat and Steak is a restaurant located inside a five-star hotel. It caters mainly to customers who are concerned about quality dining rather than the prices. In this scenario, which of the following will be a part of Wheat and Steak's strategic group?

a premium rooftop restaurant in the same city

(Quiz #5) Organizational and managerial skills that find their expression in a company's structure, routines, and culture are referred to as

capabilities

(Quiz #5) Competitors have found it extremely difficult to imitate Gene Electronics Inc.'s valuable resources, capabilities, or competencies. This is primarily because the source for the company's success has been unclear. The competitors are uncertain if Gene Electronics Inc.'s success is due to its strong leadership, the skills of its research and development team, or the timing of the company's product introductions. Gene Electronics Inc. has been protected from losing its competitive advantage as a result of

casual ambiguity

(Quiz #2) Jill is exploring multiple suppliers in order to find the best price. However, instead of calling all eight potential suppliers, she only reaches out to the first three and bases her selection on those instead of contacting all suppliers. Jill's action best describes the concept of

cognitive limitations.

(Quiz #1) Which of the following are not stakeholders?

competitors

(Quiz #2) Jennifer was just named the CEO of a pen company called National Pens Inc. She immediately changed the name to "Jenn's Pens." When asked why she made this change by the board of directors, who showed research that there was no correlation between success and CEP names, she responded by saying, "my previous company had the name of their CEO in the title, and they were very successful." This fallacy on Jennifer's part reveals her

confirmation bias.

(Quiz #2) Strategic commitments are actions that are

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

(Quiz #1) The goal of a good strategy is focused primarily on

creating superior value while containing costs.

(Quiz #4) Demand for traditional fast-food providers such as McDonald's, Burger King, and Wendy's has been on a decline in recent years. Consumers have become more health-conscious and demand has shifted to alternative restaurants like Subway, Chick-fil-A, and Chipotle. Attempts by McDonald's and Wendy's to steal customers from one another include frequent discounting tactics such as dollar menus. Such competitive actions are indicative of

cutthroat competition

(Quiz #5) In 2022 Beyond Meat's revenues have

declined 23% from last year.

(Quiz #2) The first step to gain and sustain a competitive advantage is to

define a firm's vision, mission, and values.

(Quiz #3) Tesla is addressing environmental concerns regarding the carbon emissions of gasoline-powered cars by building zero-emission battery-powered vehicles. This best represents which of the following PESTEL categories?

ecological

(Quiz #1) The amount of polyethanal that can be used in household paint is legally limited to 0.03 percent. Anything beyond this amount is hazardous to health and the environment and is considered a legal offense. Consequently, PrismPaints Corp. has vouched to make its products as safe as possible. Therefore, it manufactures polyethanal-free paints even though this increases its costs and reduces the dividends paid to its shareholders in the long run. Which of the following responsibilities is Prism Paints Corp. primarily compromising in this scenario?

economic responsibilities toward its shareholders

(Quiz #2) Visionary companies differ from their competition in that

employees in visionary organizations find meaning in their work and are motivated.

(Quiz #2) Sam, owner of Sam's Hand Sanitizer Inc., is in the middle of the strategy formulation stage. He has already allocated a substantial amount of money that covered his employees' salaries from the prior year (sunk costs) but has failed to see any positive outcomes. Given the money he has already spent, he feels as if he needs to recover those costs and pushes forward even though the outcome seems dim. This best illustrates the concept of

escalating commitment.

(Quiz #1) 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

(Quiz #1) After a firm has identified its key stakeholders in stakeholder impact analysis, the immediate next step is to

identify stakeholders' interests and claims.

(Quiz #1) The first step in stakeholder impact analysis involves

identifying the stakeholders that currently have, or potentially can have, a material effect on a company.

(Quiz #1) Due to several black swan events in the past, the

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

(Quiz #4) One problem that cities have with Airbnb rentals is

increasing rental costs for residents.

(Quiz #5) Firms that can employ and establish _________________, are more likely to protect their competitive advantage from being copied and/or eroding away.

isolating mechanisms

(Quiz #5) Core competencies are derived from the combination of

key strategic resources and a firm's capabilities.

(Quiz #4) Todd is a manager in an industry that has a few large players and that has remained relatively stable over the past few years. He finds out that legislators are proposing new laws to deregulate the industry. If the laws pass, which of these scenarios will Todd most likely face?

many new competitors

(Quiz #4) Urst Ammunition Inc., a firm controlled and managed by the government of Urst, is the only company that has the license to produce defense arms in the country. Which of the following industry competitive structures does this best illustrate?

monopoly

(Quiz #4) Firms that compete within the same strategic group generally experience

more competitive rivalry than firms outside their strategic group.

(Quiz #5) In 2020 at the start of the pandemic, Beyond Meat's business changed with

more sales from grocery stores and less sales from restaurants.

(Quiz #3) WeBreak4Bikes Inc. has a new U.S.-based client in the bicycle industry. The client's company produces only bicycles for riding on the road. The bicycles are used for reliable general purpose transportation. When asked to identify a potential substitute for the bicycle industry from the Five Forces perspective, you would select

motorcycles

(Quiz #4) All Signal Inc., a telephone service provider, has a large user base mainly because phone calls and messages between all All Signal users are free. When a person switches to an All Signals network, his or her entire network of family and friends is likely to switch to the same network to receive the benefit of free calls and messages. In addition, an existing user who gets a new user to register with All Signal Inc. is given a free wireless connection. This has helped to keep competition away from All Signal. In this scenario, which of the following factors is acting as an entry barrier for All Signal Inc.?

network effects

(Quiz #4) Firms that are classified as operating in an oligopoly tend to have some pricing power if they are able to differentiate their product or service offerings from those of their competitors, so the recommended mode of competition is

non-price-based competition.

(Quiz #5) Crocs Shoes was unable to sustain its competitive advantage over their rivals because its key strategic resource was

not costly to imitate by competitors.

(Quiz #5) When company managers formulate strategy decisions resulting from their internal analysis, they are primarily making decisions about how to

obtain and allocate critical and scarce resources.

(Quiz #3) In the streaming music industry

only major artists are able to make money.

(Quiz #5) Chips & Motherboards Inc., a leading hard drive manufacturer, recently filed for bankruptcy. While most of Chips & Motherboards Inc.'s competitors were shifting away from physical data storage devices toward online cloud storage services, Chips & Motherboards Inc. invested most of its retained earnings in the effort to improve its hard drives. Once the hard-drive market drastically declined, Chips & Motherboards Inc. was unable to capitalize on the new technology. Which of the following does this scenario best illustrate?

path dependence

(Quiz #1) Which of the following is typically an economic responsibility of a firm?

paying adequate returns to the firm's stockholders on the capital invested by them.

(Quiz #3) Apple has affected Spotify's audiobook business by

rejecting Spotify's audiobook app on Apple devices.

(Quiz #2) When young start-up entrepreneurs make claims like, "We will be the Uber of X, where X is any other category than ride hailing" or "We will be the Airbnb of Y, where Y is any other category than hospitality services" they are best illustrating which of the following cognitive biases?

representativeness bias

(Quiz #5) Southwest Airlines and Alaska Airlines both compete as point-to-point airlines, but they draw upon different resource bundles. This example best illustrates which of the following assumptions regarding the resource-based view?

resource heterogeneity

(Quiz #2) Which of the following strategy plans might work best in an industry that is considered a fast-changing environment with new laws going into effect regularly?

scenario planning

(Quiz #3) In recent years a growing number of U.S. consumers have become more health-conscious about what they eat. According to the PESTEL Framework this trend could best be classified as a ________ trend.

sociocultural

(Quiz #1) In order to better achieve a competitive advantage, firms must now adopt a holistic approach towards satisfying multiple stakeholders rather than focusing on the needs of their stockholders. This integrative approach is referred to as

stakeholder strategy

(Quiz #3) A firm's ________ relates to its ability to create value for customers while containing the cost to do so.

strategic position

(Quiz #1) 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

supplier.

(Quiz #4) We Ensure Inc., an insurance firm, replaced its existing project management software with new software from another supplier. Since the new software has different features and abilities, We Ensure has had to spend $10,000 on training its employees to use it. In this scenario, $10,000 represents We Ensure's

switching cost

(Quiz #5) 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

(Quiz #5) Which of the following will most likely be considered as an airlines core competency?

the airline's ability to make its fleet more fuel efficient than their competitors

(Quiz #5) STRIKEBYTE Inc. is a software company that has built and acquired numerous assets over the years. According to the resource-based view of a firm, which of the following assets of STRIKEBYTE Inc. will best enable it to gain and sustain a competitive advantage?

the expertise acquired by the employees in the company

(Quiz #3) Bill is researching sociocultural factors related to his employer, a sporting goods manufacturer. Which of the following would be part of the sociocultural forces in a firm's external environment?

the family size of the firm's target market

(Quiz #3) After music streaming, Spotify sought to enter

the podcast industry.

(Quiz #5) 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

(Quiz #5) Beyond Meat's products are unique because

they are made of pea protein using a special process.

(Quiz #3) The internet service provider industry in the country of Wakanda is an industry characterized by the presence of strong network effects, high brand loyalty, high economies of scale, and proprietary technology among incumbent firms. Thus, in the internet service provider industry, the

threat of new entrants is most likely low.

(Quiz #2) The Founder of Teach for America, Wendy Kopp, wants to make teaching an attractive option for promising young professionals. Identify the phrase that represents the vision she developed for Teach for America.

to give all children in the United States the opportunity to attain an excellent education

(Quiz #5) CarTsar Inc. is a manufacturer of automobile parts, which it sells to retail auto supply stores. Its core competencies include superior design and engineering capabilities, as well as a highly integrated and efficient supply chain. To sustain its competitive advantage, CarTsar should first

upgrade its engineering department and improve its supply chain.

(Quiz #3) During an interview for a CEO position, Jennifer's potential employers ask her, "If you get this job, will you focus more on industry effects or firm effects?" What should her answer be?

"Firm effects. I will be able to have the most impact on those."

(Quiz #2) Four years after Facebook's founding, it had amassed _____ users, an unprecedented achievement at that time.

100 million

(Quiz #4) How much does Airbnb charge the host for a booking made on Airbnb?

3% of the booking revenue.

(Quiz #3) What is an example of customer switching cost?

A customer losing his playlists when changing to another music provider.

(Quiz #2) 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.

(Quiz #1) What is an example of new tools that YouTube is providing for content creators?

All answers are correct ( Providing avatar creation, using different backgrounds, Making videos in other languages.)

(Quiz #4) A "perfectly competitive" industry is one that

All of the answers are correct ( has commodity product offerings, usually exhibits low profitability, have difficulty achieving even a temporary competitive advantage.)