Business Strategy

What is the first step in the AFI strategy framework? Multiple choice question. -Analysis -Application -Acceptance -Assurance

Analysis

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? Multiple choice question. -The bulbs must be on the market for a longer period of time than competitors' bulbs. -The bulbs must be more expensive than competitors' offerings. -The bulbs must be sold by online retailers only. -The bulbs must have a lower cost than competitors' bulbs.

The bulbs must have a lower cost than competitors' bulbs.

Chapter 1

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The firm's accounting profitability, ability to create shareholder value, and ability to generate economic value tend to be ______. Multiple choice question. -unrelated -unrealistically bound -perpendicularly related -correlated

correlated

The business model used by telecommunication companies when they provide a basic cell phone at no charge when the customer signs a two-year contract is a combination of which of the following types of business models? (Check all that apply.) Multiple select question. -razor--razor-blade -pay-as-you-go -subscription -freemium

subscription & razor--razor-blade

A competitive advantage that lasts for a long period of time is said to be ______. Multiple choice question. -sustainable -topical -geographic -accurate -theoretical

sustainable

Michael's Deli is able to perform at the same level as its primary competitor. Michael's Deli has ______. Multiple choice question. -competitive parity -a competitive disadvantage -a noncompetitive business -a competitive advantage

competitive parity

When a firm goes bankrupt, shareholders ______. Multiple choice question. -are entitled to help pay off debtors owed money by the firm -can sue for loses -are entitled only to a fraction of their investment -cannot recover their risk capital

cannot recover their risk capital

In order to determine if Home Depot has a competitive advantage, we must compare Home Depot's performance to ______. Multiple choice question. -the performance of other firms in its industry -only non-US-based firms -its past financial performance -a firm in the technology industry

the performance of other firms in its industry

Which of the following would be labeled variable costs by a computer manufacturer? (Check all that apply.) Multiple select question. -the administrative assistant -manufacturing facilities -display screens -hard drives

display screens and hard drives

Strategy is ______. Multiple choice question. -the set of actions a firm takes to achieve a competitive advantage -a decision based on internal situational analysis -a sustainable and dominant market share -a decision based on external situational analysis

the set of actions a firm takes to achieve a competitive advantage

Chapter 5

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True or false: The best measure of competitive advantage can be found in the performance of specific departments. True false question. True False

False

Which of the following statements is true about a firm's stock price? Multiple choice question. -The price is not correlated with the firm's economic value creation. -The price determines in part the stock's market valuation. -The price is calculated exactly from the firm's accounting profitability. -The price tends not to reflect accounting profitability.

The price determines in part the stock's market valuation.

Which of the following are elements of the social dimension of the triple bottom line? (Check all that apply.) Multiple select question. -achieving work/life balance -reducing overhead costs -human sustainability -improving recycling efforts

achieving work/life balance human sustainability

In a(n) ______ strategy formulation, managers focus on deciding HOW the firm should compete. Multiple choice question. -business -global -external -corporate

business

Which of the following are primary strategy objectives? (Check all that apply.) Multiple select question. -controlling costs -creating value -strengthening relationships -maximizing sales

controlling costs and creating value

The balanced scorecard approach helps managers balance ______ goals. Multiple choice question. -opportunity and transitional -financial and strategic -fixed and variable -advantaged and disadvantaged

financial and strategic

The money a firm spends to set up a sales website can be considered a ______ cost. Multiple choice question. -competitive -low -fixed -variable

fixed

The balanced scorecard framework draws from which of the following? Multiple choice question. -from internal metrics only -from the same metrics applied to internal resources and the external environment -from multiple internal and external performance metrics -from external metrics only

from multiple internal and external performance metrics

Using a(n) ______ strategy formulation, managers examine where and how the firm should compete around the world. Multiple choice question. -governance -immediate -business -global

global

Which of the following elements comprise strategic management? (Check all that apply.) Multiple select question. -definition -implementation -realization -formulation -analysis

implementation, formulation, analysis

A competitive advantage _____. Multiple choice question. -places a firm at a disadvantage in regards to its ROI -is assessed relative to other competitors in the industry -is based on the return of invested capital over a 15-year period -takes into consideration globalization and rival factor

is assessed relative to other competitors in the industry

Managers have ______ resources in their quest for competitive advantage. Multiple choice question. -zero -unique -unlimited -limited

limited

In the ______ step of the strategy implementation phase of the AFI strategy framework, managers would examine how the firm should be structured in order to implement the desired strategy. Multiple choice question. -business ethics -corporate governance -internal analysis -organizational design

organizational design

To determine a product's producer surplus, which of the following must be compared? (Check the two that apply.) Multiple select question. -The price charged -The cost of production -The overhead costs -The number of products sold

price charged and cost of production

Which of the following performance dimensions matter in judging the effectiveness of a firm's strategy? (Check all that apply.) Multiple select question. -international -qualitative -natural -quantitative

qualitative quantitative

From the view of a shareholder, the measure of competitive advantage that matters most is return on ______. Multiple choice question. -risk capital -invested capital -assets -revenue

risk capital

Which of the following dimensions make up the triple bottom line? (Check all that apply.) Multiple select question. -international -social -ecological -economic

social ecological economic

In the external analysis phase of the AFI strategy framework, managers should ask, Multiple choice question. -"What effects do internal resources, capabilities, and core competencies have on the firm's competitive advantage?" -"How does the firm make money? -"What is the relationship between competitive advantage and firm performance?" -"How do external forces affect our strategy and competitive advantage?"

"How do external forces affect our strategy and competitive advantage?"

Which of the following statements are true about the rival businesses Apple and Microsoft? (Check all that apply.) Multiple select question. -Microsoft almost went bankrupt in late 1990s. -Apple's primary business for several decades was to sell computers to corporations. -Apple introduced a series of popular consumer electronic devices. -Microsoft leveraged its computer operating system to sell other software programs.

Apple introduced a series of popular consumer electronic devices. Microsoft leveraged its computer operating system to sell other software programs.

Which statements about creating and implementing an effective business model are true? Multiple select question. -Firms must transform their competitive strategy into a blueprint of initiatives and actions that support their goals. -Firms must implement their competitive strategy blueprint through processes, procedures, culture, and structure. -Firms must use a blueprint to come up with strategies for how the firms will compete in the market. -Firms that wish to be truly innovative and original must avoid using a blueprint, which might be limiting.

Firms must transform their competitive strategy into a blueprint of initiatives and actions that support their goals. Firms must implement their competitive strategy blueprint through processes, procedures, culture, and structure.

Firms should identify a ______ so that employees can determine if they are making progress in addressing it. Multiple choice question. -previous competitive advantage -clear competitive challenge -statement of desire -source of goal conflict

clear competitive challenge

Achieving competitive advantage means maximizing the difference between which of the following? (Check the two that apply.) Multiple select question. -consumers' willingness to pay -the number of rival firms -cost to produce the good or service -advertising costs

consumers' willingness to pay cost to produce the good or service

For a product that has a large economic value, a firm can choose to charge the same price as competitors in order to ______. Multiple choice question. -gain market share -cover opportunity costs -maximize profit -increase return on invested capital

gain market share

In order to be considered a legal owner of a public company, a person or organization must ______. Multiple choice question. -be a member of the company's board of executives -own a majority of the company's stock -own at least one share of the company's stock -own at least two products manufactured by the company

own at least one share of company's stock

The overall purpose of a firm's strategy is to ______. Multiple choice question. -determine demand for new product ideas -perform better than other companies in the same industry -sell all existing inventory of a given product -generate significant interest from foreign investors

perform better than other companies in the same industry (have competitive advantage)

The business model used by telecommunication companies when they provide a basic cell phone at no charge when the customer signs a two-year contract is a combination of which of the following types of business models? (Check all that apply.) Multiple select question. -freemium -razor--razor-blade -pay-as-you-go -subscription

razor--razor-blade subscription

Why should a firm define a clear competitive challenge? Multiple choice question. -so that external stakeholders have the same information as internal stakeholders -so that managers can substitute tactical tools for a traditional strategy -so that the firm can achieve competitive parity -so that employees can assess their progress toward addressing it

so that employees can assess their progress toward addressing it

Investors in a company are mostly concerned about the company's ______. Multiple choice question. -opportunity cost -planned emergence -return on invested assets -total return to shareholder

total return to shareholders

A well-devised strategy is about which two things? Multiple select question. -what not to do -what to do -market trends in unrelated industries -past successes or failures

what not to do & what to do

In which of the following situations can a firm providing goods and services gain a competitive advantage? (Check all that apply.) Multiple select question. -Their offerings are similar to competitors' offerings at higher prices. -Their offerings cost more to produce than competitors' offerings. -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.

-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.

Which of the following topics should be considered during the analysis phase of the AFI framework? Multiple select question. -the role of strategic leadership and the strategy process -the firm's business model and competitive advantages -the external environment and associated challenges -the firm's internal strengths and resources -the locations in the world where the firm should complete

-the role of strategic leadership and the strategy process -the firm's business model and competitive advantages -the external environment and associated challenges -the firm's internal strengths and resources

Which statement about strategies is true? Multiple choice question. -Vision and mission statements cannot lay the foundation for good strategies. -Statements of desire typically address economic fundamentals. -"We will be the best!" is an example of a strategy. -A statement of desire on its own often leads to goal conflict.

A statement of desire on its own often leads to goal conflict.

The question "How do we implement the formulated strategy through an organizational structure, culture, and control system that values and encourages ethical behavior?" would most likely be examined by managers in the ______ phase of the AFI strategy framework. Multiple choice question. -analysis -implementation -formulation

implementation

Sustainable competitive advantage exists when a firm ______. Multiple choice question. -formulates and implements strategy -is self-regulated and self-motivated -maintains superior performance relative to its industry over a long period of time -starts up and competes for existing market share in the industry

maintains superior performance relative to its industry over a long period of time

When a company offers video-game consoles at a steep discount, but charges customers high fees for games, they are operating on a ______ business model. Multiple choice question. -razor—razor-blade -wholesale -motivator-motivation -pay-as-you-go

razor—razor-blade

With a(n) ______, firms describe how they turn strategy into action. Multiple choice question. -scorecard plan -business model -VRIO framework -triple bottom line

business model

The difference between the cost of producing a product and the price consumers are willing to pay for that product is known as ______. Multiple choice question. -overhead derivative pricing -stock price appreciation -a profit margin -economic value created

economic value created

Which of the following statements is best illustrated by the decades-long business rivalry between the technology giants Apple and Microsoft? Multiple choice question. -Technological change has little influence on a firm's competitive advantage. -A company that shrinks to less than 10% market share cannot grow again significantly. -Once a company becomes highly dominant in its industry, it cannot be displaced. -A firm's competitive advantage is transitory.

A firm's competitive advantage is transitory.

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 ______. Multiple choice question. -competitive parity -the competitive challenge -strategic positioning -competitive disadvantage

strategic positioning

The field of management that focuses on attaining competitive advantage by combining analysis, formulation, and implementation is known as ______. Multiple choice question. -management of foundational behavior -management of stakeholder impact -strategic management -human resources management

strategic management

Competitive parity occurs when ______. Multiple choice question. -the performance of two or more firms is superior to the industry average -two or more firms achieve the same performance results -two or more firms enter into a strategic alliance -two or more firms rely on international outsourcing to remain competitive

two or more firms achieve the same performance results

Which of the following statements regarding tasks in the AFI strategy framework is true? Multiple choice question. -Only two of the tasks need to be followed for success. -The tasks are interchangeable. -The tasks are very interdependent. -The tasks happen in sequence as separate steps.

the tasks are very interdependent

Walmart and Nordstrom maintain very different strategic profiles, one based on cost-leadership and the other based on differentiation through superior customer service. This is an example of ______. Multiple choice question. -differences in industry norms -a strategic failure by Walmart -the trade-offs required by strategic positioning -a strategic failure by Nordstrom

the trade-offs required by strategic positioning

Managers often have to make decisions between two conflicting strategic options, otherwise known as ______. Multiple choice question. -hot-points -trade-offs -bad choices -managerial dilemmas

trade-offs

True or false: A statement such as, "We will be the biggest company in the world," is an example of strategy. True false question. True False

False

When competitive advantage is assessed from an analysis of publicly available data, a firm measures its ______. Multiple choice question. -economic value created -triple bottom line -accounting profitability -balanced scorecard

accounting profitability

Netflix had a successful business model based on a large library of streaming content but then achieved even more success by also producing and distributing original content. This is an example of the potential value of ______. Multiple choice question. -consumer cost sharing -revenue depreciation -business model innovation -overhead maximization modeling

business model innovation

A(n) ______ occurs when a firm performs below the industry average or is outperformed by its competitors. Multiple choice question. -competitive parity -purchasing parity -competitive disadvantage -underperforming norm -negative advantage

competitive disadvantage

If a firm has a 10% return on invested capital while the industry average return on invested capital is 18%, the firm has a(n) ______. Multiple choice question. -purchasing parity -competitive parity -overperforming norm -competitive disadvantage

competitive disadvantage

A company's total return to shareholders consists of which of the following? (Check all that apply.) Multiple select question. -Capital depreciation -Dividends received -Wages -Stock price appreciation

dividends received and stock price appreciation

The legal owners of publicly traded companies are called ______. Multiple choice question. -stock brokers -executives -shareholders -business holders

shareholders

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 ______. Multiple choice question. -strategy -core values statement -vision -competitive parity

strategy

Managers implement the blueprint of their business model through which of the following? (Check all that apply.) Multiple select question. -structures -processes -voice memos -culture

structures processes culture

Combining the razor-razor-blade model and the subscription model means that telecom providers make their money through lengthy service plans, which in turn means that it is crucial that they keep their ______ rate, or the proportion of subscribers who leave, down. Multiple choice question. -scorecard -agency -freemium -churn

churn

Public companies are required by law to release detailed accounting data, which enables ______. Multiple choice question. -comparative analysis of firms -economic value creation -a balanced scorecard system -shareholder value creation

comparative analysis of firms

Burger Bomb has been outperforming other burger restaurants for a decade. This indicates that Burger Bomb has which of the following? Multiple choice question. -a competitive advantage -a statistical advantage -a superior product -strategic leadership

competitive advantage

When implementing the razor-razorblade strategy, companies make their profit from ______. Multiple choice question. -subscription fees -razors -initial products -complementary goods

complementary goods

If Tom would have paid $1,000 for a new laptop but was able to purchase one for $800, the $200 he saved is considered his ______. Multiple choice question. -reservation price -producer surplus -economic value -consumer surplus

consumer surplus

Economic value created is the ______ the cost to produce a product/service and the amount the buyer is willing to pay for it. Multiple choice question. -greater of either -total sum of -difference between -lesser of either

difference between