Business Policy and Strat Exam 2 Questions

Assume that the market for print book publishing has entered the maturity stage. Which of the following would most likely exist during this stage?

A few large publishers

The market capitalization of a public company is $5 billion. Each share of the company is traded at $200. What do you infer from this financial data?

Apple had a higher return on invested capital than Microsoft.

Which of the following statements correctly compares Apple and Microsoft in 2016?

Apple had a higher return on invested capital than Microsoft.

Jimmy can be categorized under the late majority customer segment. Which of the following behaviors is he most likely to exhibit?

He will prefer to buy from well-established brands rather than unknown new ventures.

Which of the following is a disadvantage of measuring firm performance through total return to shareholders and firm market capitalization?

Market volatility makes it difficult to assess firm performance through these measures, particularly in the short term.

Jonathan is the owner of a landscaping company that caters to a very wealthy clientele. His company has struggled to differentiate itself from the other high-end landscapers in the area, but because he has hired several expensive but highly qualified team members, Jonathan is unable to shift to a cost-leadership strategy. Which strategy is most likely to achieve a competitive advantage?

Narrow the scope of competition and focus on unique features such as the use of organic materials.

Feran is the founder of an innovative "impromptu catering" business that provides elegant, healthy party food and decorations on less than 24 hours' notice. The company has grown by over 150 percent in the past year. Feran credits some of the company's success to studying the strategies of prominent social entrepreneurs, such as Wikipedia's Jimmy Wales. What can Feran do to exemplify the social entrepreneurship model?

Provide free weekly catered meals for the homeless.

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

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

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

a consumer electronics company popular among price-conscious customers.

Tough Guy's Inc. is a chain of gyms. It offers a fitness package that allows its members to use the gym facilities for 12 months by paying only for 10 months. Included in the package are two health check-ups and a gym kit. These add-ons by themselves are not very valuable, but as a package they can enhance the perceived value of the service offerings. In this case, Tough Guy's primary value driver is

availability of complements.

Benny's Closet Inc. is an apparel company that caters to highly price-conscious customers. Through its simple apparel designs, acceptable quality levels, and minimal customer service, the company has been able to sell its merchandise at the lowest prices in the industry. Which of the following generic business strategies is Benny's Closet applying?

cost-leadership

A firm incurs $400 to manufacture a computer. In the market, customers are willing to pay a maximum of $600 for the computer priced at $500. The difference of $200 ($600 minus $400) is the

economic value created.

As a research scholar, Linda had built a helicam as part of her project. The helicam could capture aerial images. Realizing the potential use of this product in movie production and military and rescue operations, she started a new venture where she could customize these helicams to fit the specific needs of the buyers and sell them. Linda can be best described as a(n)

entrepreneur.

Bath & Chill is a spa that caters to the needs of a small percentage of highly health-conscious consumers. It offers state-of-the-art treatments in a luxurious setting. Since there are very few spas that offer the same unique services, customers are willing to pay a premium price for its products and services. In this scenario, Bath & Chill is following a

focused differentiation strategy

All of the following are generic business-level strategies except

focused marketing strategy.

The balanced-scorecard framework is a tool for strategy ________, not ________.

implementation; formulation

After the creation of social networking websites were introduced, their value increased exponentially as the number of users increased. This is the positive effect of a(n)

network effect.

A disruptive innovation leverages ________ technologies, while architectural innovations are based on ________ technologies.

new; existing

Susan wants to create a networking site that would connect local artists to homeowners who are looking for unique and original art. She knows that network effects will play a big role in her success and doesn't want to build her business using a linear value chain. Susan would best be served by employing a(n)

platform business model.

Facebook has become one of the largest media companies in the world, valued at nearly 50 billion in 2019, but hasn't produced a single piece of content. Facebook is an example of a

platform business.

Connell Inc. has been successful at differentiating itself from competitors by claiming a premium price for its digital cameras based on superior image quality and advanced technology. In this scenario, which of the following is the key value driver?

product features

Customer service and ________ are two of the value drivers that managers can utilize when trying to improve a firm's differentiation strategic position.

product uniqueness

Managers can justify using the balanced-scorecard framework because research show that both ________ and ________ performance dimensions are important when examining the effectiveness of a firm's strategy.

quantitative, qualitative

Karat Packaging has entered a stage in which the demand for their innovative fax machines has declined. Now most customers are buying replacement parts or buying their second fax machine from the firm. What stage in the industry life cycle does this scenario describe?

shakeout stage

A high percentage of R&D/Revenue ratio indicates a(n)

strong focus on innovation to improve current products and services.

Fresher Corp. produces electric bathroom fragrance diffusers and sells the electric outer device at a market rate price. However, they lock their clients into a two-year agreement to purchase the perfume refills solely from them on a monthly basis. Which of the following business models does this best illustrate?

subscription-based

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

tangible.

Tom is attempting to measure how his customers views his firm. To do this, he uses the balanced-scorecard framework because he knows that

the customer perspective is directly linked to firm revenues and profits.

Which of the following is a firm effect that has an impact on the competitive advantage of a firm?

the value and the cost position of the firm relative to its competitors

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

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