Capstone Exam 2A strategic resource is an asset that is valuable, rare, difficult to imitate, and nonsubstitutable.
Which of the following best describes the blue ocean strategy? A. A firm using a blue ocean strategy tries to make the competition irrelevant. B. It involves combining ideas from existing businesses in order to create a new business. C. It involves introducing a lower-end brand to protect the firm's market share without devaluating the firm's existing brands. D. It involves a firm intentionally establishing a small position within a market in which it does not yet compete. E. Such a strategy conflicts with, and threatens to replace, traditional approaches to competing within an industry.
A. A firm using a blue ocean strategy tries to make the competition irrelevant.
Companies use concentration strategies to grow within an industry. A company can use one, two, or all three as part of its effort to excel within an industry. Which of the following are concentration strategies? A. All of these B. Market Development C. Product Development D. Market Penetration
A. All of these
Enchanted Toys Inc., an American toy manufacturing firm, splits up the process of creating a toy into a series of smaller tasks. Each task is performed by a group of people who are specialized in that task. In this example, Enchanted Toys Inc. uses which of the following processes? A. Division of labor B. Unity of command C. Decentralization D. Vertical linkages
A. Division of labor
_____ is one of the five primary activities that value chains include. A. Inbound logistics B. Procurement C. Technology D. Human resources
A. Inbound logistics
Comfort Shoes Inc. is a firm that manufactures orthopedic shoes and sells them at retail stores in New York. Based on the popularity of the shoes, the firm decides to open an outlet in New Jersey to sell the existing line of orthopedic shoes. In this example, Comfort Shoes Inc. uses which of the following strategies? A. Market development B. Product development C. Marketing D. Related diversification
A. Market development
Which of the following is the solution to the challenge created by division of labor—figuring out how to coordinate different tasks and the people who perform them? A. Organizational structure B. Blue Ocean strategy C. Concentration D. Decentralization
A. Organizational structure
_____ are legal decrees that protect inventions from direct imitation for a limited period of time. A. Patents B. Copyrights C. Trademarks D. Trade secrets
A. Patents
Which of the following is a secondary activity that value chains include? A. Technology B. Inbound logistics C. Service D. Marketing and sales
A. Technology
A firm that has operations in more than one country is known as a multinational corporation. A. True B. False
A. True
A foothold is a small position that a firm intentionally establishes within a market in which it does not yet compete. A. True B. False
A. True
A strategic resource is an asset that is valuable, rare, difficult to imitate, and nonsubstitutable. A. True B. False
A. True
Firms often rely on advertising to implement the concentration strategy of market penetration. A. True B. False
A. True
First movers must be willing to commit sufficient resources to follow through on their pioneering efforts. A. True B. False
A. True
Just-in-time inventory management conserves space and lowers costs by requiring inputs to a production process to arrive at the moment they are needed. A. True B. False
A. True
Most unrelated diversification efforts are not successful. A. True B. False
A. True
Offshoring involves relocating a business activity to another country. A. True B. False
A. True
Political risk refers to the potential for government upheaval or interference with business to harm an operation within a country. A. True B. False
A. True
Resources refer to what an organization owns, capabilities refer to what the organization can do. A. True B. False
A. True
The four Ps of marketing are: product, price, place, and promotion. A. True B. False
A. True
The three factors that determine the likelihood of a firm responding to a competitive move are awareness, motivation, and capability. A. True B. False
A. True
The _____ principle states that each person should only report directly to one supervisor. A. Unity of command B. Division of labor C. Bricolage D. Informal links
A. Unity of command
Which of the following components of an organizational chart ties supervisors and subordinates together? A. Vertical linkages B. Horizontal linkages C. Organizational assignments D. Office mates
A. Vertical linkages
Resources that do not have all four qualities can still be very useful, but they. A. are unlikely to provide long-term advantages B. are difficult to allocate C. always lead to additional opportunities D. are rarely inexpensive
A. are unlikely to provide long-term advantages
In Germany, there are nearly eight thousand miles of superhighways known as autobahns where no speed limits for cars are enforced. Many Germans enjoy driving at 150 mph or more, and German automakers must build cars capable of safely reaching and maintaining such speeds. This conditional requirement on German automakers represent what aspect of the diamond model? A. demand B. supporting C. factor D. fixed E. concentration
A. demand
Carlton Group Inc., a firm that manufactures ceramic and porcelain tiles, structures its organization into the following departments: marketing, production, human resources, finance, and customer service. Each employee is grouped into one these departments and each department is headed up by a manager. Carlton Group Inc. is most likely using a _____ organizational structure. A. functional B. mosaic C. boundaryless D. simple
A. functional
Macro Pvt. Ltd. is a software development firm that provides software in accounting, customer relationship management, HR and payroll management, and enterprise resource planning. The firm is based in Virginia and has operations across different continents. The firm had a unit in Syria, where there were severe disturbances by anti-government groups. The instability in Syria made it difficult for Macro Pvt. Ltd. to run its business operations in that country. This implies that the firm was experiencing a _____ in Syria. A. political risk B. cultural risk C. default risk D. legal risk E. lifetime risk
A. political risk
A backward vertical integration strategy involves a firm entering a buyer's business. A. True B. False
B. False
A firm using a transnational strategy sacrifices responsiveness to local requirements within each of its markets in favor of placing heavy emphasis on being efficient. A. True B. False
B. False
All difficult to imitate strategic resources are protected by various legal means including trademarks, patents, and copyrights. A. True B. False
B. False
Diversification involves creating a new company whose stock is owned by investors. A. True B. False
B. False
Intangible resources of a firm include the knowledge and skills of its employees, its reputation, and its property, plants, and equipment. A. True B. False
B. False
Johannes Gutenberg's printing press is a classic example of the foothold strategy. A. True B. False
B. False
Porter's five forces analysis is the best-known approach to portfolio planning. A. True B. False
B. False
Strengths and weaknesses, as a part of the SWOT analysis, refer to external events and trends. A. True B. False
B. False
The BCG matrix analysis suggests that profits from cash cows should be invested back into cash cows. A. True B. False
B. False
The process of seizing a firm's assets in a country by the national government is known as centralization. A. True B. False
B. False
The impact of smartphones on the video camera industry is a(n)
Disruptive Innovation
Apple's creation of a user-friendly, small computer when it was just a startup is an example of:
First-Mover Advantage
________ involves very rapid and unpredictable moves and countermoves that can undermine competitive advantages.
Hypercompetitive
With _______ competition, a company faces the same rival in more than one market.
Multipoint