conceptual exam

To provide a sustainable competitive advantage, a capability must satisfy all of the following criteria EXCEPT: A Be technologically innovative B. Be valuable to customers C. Be hard for competing firms to duplicate D. Be without good substitutes

A. Be technologically innovative

Customer Loyalty programs such as airline frequent flyer roles are an attempt to: A. Increase customers' switching costs B. Develop a cost advantage independent of scale C. Overcome the profitability of the hotel "product" D. Decrease competitors access to distribution channels

A. Increase customers' switching costs

Intel and ADM seem to be the only two providers of microprocessors to PC makers. Which of the following statements is most likely to be true?A. The price of the microprocessors will be high because of the bargaining power of the supplier B. The price of the microprocessors will be high because of the bargaining power of the buyer C. The price of the microprocessors will be moderate because of economies of scale D. The price of the microprocessors will be low because of the bargaining power of the buyer

A. The price of the microprocessors will be high because of the bargaining power of the supplier

Several months ago, a restaurant developed a new appetizer that is a hit with customers. Many customers go to the restaurant just for the appetizer, and it was at the center of a recent highly positive review by a food critic. Preparation involves common ingredients and average culinary skills but requires a very high oven temperature, which significantly increases utility costs. Several competing restaurants have since added their own version of the appetizer to their menu. Which of the following criterion for assessing capabilities/core competencies is met? A. The restaurant has the capability to develop something that is valuable. B. The restaurant has the capability to develop something that is rare. C. The restaurant has the capability to develop something that is costly to imitate. D. All of these criteria are met

A. The restaurant has the capability to develop something that is valuable.

A cost leadership strategy provides goods or services with features that are:

Acceptable

Industry analysis is a tool used to:

Analyze the industries attractiveness by looking at its structure

A firm's core strategy is its ____ strategy. a. corporate b. business level (generic) c. pricing d. international

B. Business level (generic)

A financial management firm has existed for more than 70 years. Some of its original clients' grandchildren are now clients of the firm themselves. The partners and staff of the firm have spent most or all of their careers with the firm. Many have even married into each other's families. This firm has capabilities that would be costly to imitate because of its A. Access to large amounts of financial capital B. Social complexity C. Common historical conditions D. Causality ambiguous core competencies

B. Social complexity

50. Blind taste-tests have shown that the taste of premium-priced vodkas and inexpensive vodkas are indistinguishable even to regular drinkers of vodka. But the sales of premium vodkas are thriving. This is an example of ____ A.The risk of product imitation by competitors B. the perception of perceived prestige and status as a means of differentiating a product C.The danger counterfeiting holds for firms pursuing the differentiation strategy D.Th importance of high quality raw materials when using the differentiation strategy

B. the perception of perceived prestige and status as a means of differentiating a product

DWK Foods has developed a line of cookies and candies sweetened exclusively with organic honey. Although DWK is selling some of the products over the internet. In order to gain economies of scale the products must be sold in retail outlets. The main barrier to entry DWK is likely to encounter here is A. Government licensing and permits B. Consumers switching costs C. Access to distribution channels D. Cost disadvantages independent of scale

C. Access to distribution channels

In 2013 Pets and Vets Partners (PVP), a Philadelphia PA veterinary practice, added PetMedSpa, a pet weight loss and rehabilitation facility that included the most advanced orthopedic rehabilitation equipment within 80 miles. Pets and Vets also added new highly trained staff to run the Spa. By opening the Spa, PVP seeks: A. Economies of scale B. Competitive Parity C. Competitive Advantage D. Cost Leadership

C. Competitive Advantage

For strategic positioning, firms do things differently or do different things. Strategic positioning can be based on all of the following except: A. variety of company's products or services B. Operational effectiveness C. Customer's needs D. Customer's accessibility

C. Customer's needs

A general environmental analysis can be expected to produce all of the following except A. Identification of organizational threats B. Identification of organizational opportunities C. Objective answers D. Recognition of environmental trends

C. Objective answers

New entrants to an industry are more likely when A. Economics of scale in the industry are high B. It is difficult to gain access to distribution channels C. Product differentiation in the industry is low D. Capital requirements in the industry are high

C. Product differentiation in the industry is low

_____ are the source of a firms _____, which are the source of the firms _______. A. Capabilities; resources; core competencies B. Capabilities; resources; above-average returns C. Resources; Capabilities; core competencies D. Core competencies; resources; competitive advantage

C. Resources; Capabilities; core competencies

An analysis of society's attitudes and values would be conducted when studying the general environment A. Global B.Economic C.Sociocultural D. Demographic

C. Sociocultural

Economies of scale refers to the fact that as the A. quantity of product produced in a given time period increases, the cost of manufacturing each unit increases. B. quantity of product produced in a given time period increases, the cost of manufacturing each unit remains constant. C. quantity of product produced in a given time period increases, the cost of manufacturing each unit decreases. D. quantity of product produced in a given time period decreases, the cost of manufacturing each unit decreases.

C. quantity of product produced in a given time period increase, the cost of manufacturing each unit decreases

The use of differentiation strategy would be expected to be LEAST effective in which of the following markets?

Commodity goods

What is the difference between substitute and complementary products?

Complementary products increase the average price of them, whereas substitutes do the opposite

Specialization allows strong:

Control of individuals

A fundamental challenge of organizing is to achieve a compromise between:

Cooperation and coordination

A river barge company can offer cheaper although slower per pound transportation of products to companies when companies with transportation by air, truck, or sail. The river barge company should first target customers whose companies use The interpreted cost leadership differntiation strategy Either of the focus strategies Any of the strategies except the focused differentiation strategy Cost leadership strategy

Cost leadership strategy

Business level (generic) strategies are concerned specifically with Creating differences between the firm's position and its competitors How a business with multiple physical locations will operate one of those locations How functional areas will be organized within the firm Selecting the industries in which the firm will compete

Creating differences between the firm's position and its competitors

The differentiation strategy can be effective in controlling the power of rivalry with existing competitors in an industry because

Customers are loyal to brands that are differentiated in meaningful ways

The differentiation strategy can be effective in controlling the power of rivalry with existing competitors in an industry because Customers develop brand loyalty A differentiating firm can always raise prices Customers have low switching costs Substitute products are lower quality

Customers develop brand loyalty

Which of the following statements is TRUE about the change in industry structure? A. Industry structure cannot be charged at all over time B. The expiration of a patent may cause a high rate of firm entries into the industry C. The availability of complementary producers increases the threat of substitutes D. As an industry matures and rivalry intensifies over time, industry profitability increases

D. As an industry matures and rivalry intensifies over time, industry profitability increases

A major department store chain has a strict policy of banning photographs or videos of its sales floor or back-room operations. It also does not allow academics to conduct studies of it for publication in research journals. In fact, some of its own top managers refer to the managements policies on secrecy as "verging on paranoid". These policies indicate that the top management of the firm believes the organizations competencies are A. Common B. Unobservable C. Casually ambiguous D. Limitable

D. Limitable

A certain marble quarry provides a unique type of marble that is richly colored and strikingly veined. It has been used for churches and public buildings throughout the world. The architect of a new headquarters for a prestigious Fortune 500 firm has specified the use of this marble, and this marble only, for the project. Which of the following statements is most likely to be true? A. The cost of the marble will be expensive because of the high strategic stakes involved. B. The cost of the marble will be moderate because of the bargaining power of the buyer C. The cost of the marble will be moderate because of economies of scale D. The cost of the marble will be expensive because of the bargaining power of the supplier

D. The cost of the marble will be expensive because of the bargaining power of the supplier

ACME Corp. is a leading provider of radios to the commercial market. Its products all rely on printed circuit-board technology. ACME has protected its market leadership with continued advancements in this technology, which it patents. A competitor has developed a radio for this market with equal performance but uses a software-based technology instead of circuit boards. ACME's technology leadership fails which of the following capability tests? A. The value test B. The rareness test C. It fails all three of these tests D. The substitutability test.

D. The substitutability test

If one considers commodities vs. more sophisticated products, one can conclude that:

Differentiated products provide stronger margins

What is the difference between differentiation and segmentation?

Differentiation deals with the "how" a firm competes - segmentation describes the "where" a firm competes

All of the following are ways that a good or service can be differentiated EXCEPT Responsive customer service Engineering design and performance Economies of scale and efficient operations Perceived prestige and status

Economies of scale and efficient operations

The Monteleone Company pays large fees to a highly recognizable, prestigious individual to be the spokesperson for the company's products, luxury private jets. Monteleone is probably following the:

Focused differentiation strategy

The industry life cycle has four phases:

Introductory, growth, maturity, and declide

The analysis of the activity map of a successful company such as Southwest airlines emphasizes how:

It is hard for rivals to match a configuration of integrated activities than to imitate a single activity

A company using a narrow target market in the business strategy is Focusing on a broad array of geographic markets Following a cost leadership business strategy Decreasing the group of customer segments served Limiting the group of customer segments served

Limiting the group of customer segments served

Research suggests that having a competitive advantage in ____ creates more value in the cost leadership strategy than it does in the differentiation strategy Human resource management Marketing and Sales Technology development Logistics

Logistics

Business level (generic) strategies detail commitments and actions taken to provide value to customers and gain competitive advantage by exploiting core competencies in :

Particular geographic locations Primary value chain activities Specific product markets The macro environment

The products or services that are differentiated from others have qualities that are Perceived as standardized by the customer Perceived by the customer to add value for which they will pay a premium Seen as classic attributes rather than passing fads Valued by the typical industry customer

Perceived by the customer to add value for which they will pay a premium

Ever improving levels of efficiency enhance profit margins for a cost leader. This effects which of the five forces of industry structure most directly Substitutes Buyer power Supplier power Potential entrants

Potential entrants

The threat of new entrants is increased if

Product differentiation in the industry is low

All of the following are considered generic business-level strategies EXCEPT

Product diversification

The typical risks of a cost leadership strategy include The inability to balance high differentiation and low price Loss of customer loyalty Excessive differentiation to the point where the customer base is too small Production and distribution processes becoming obsolete

Production and distribution processes becoming obsolete

Personal computers, credit cards, securities brokering, and internet access are examples of:

Relatively new industries that have gained a dominant status

Strategy is fundamentally about Being better than rivals Winning Satisfying all stakeholders Being an excellent "corporate citizen

Satisfying all stakeholders

Contribution analysis can be applied in various ways to test the sensitivity of break-even points by adjusting

Selling price, variable costs, and fixed costs

When implementing a focus strategy the firm seeks to Offer products that are both differentiated and low cost Target the typical customer in an industry Move into the global market Serve the specialized needs of a market segment

Serve the specialized needs of a market segment

Strategic fit among many activities (in an activity map) is functioning to Sustainability of a firm's competitive advantage The depth of competitive scope for a firm The integrity of the firm's value chain The firm's economies of scale

Sustainability of a firm's competitive advantage

Which of the following, identified in an analysis of the general environment, is an opportunity for an entrepreneur who wishes to open a business providing "Fitness for Life" physical conditioning services (strength, balance, and flexibility training) in a city of 100,000 people? A Chiropractor and two independent physical therapists are located in his community The level of unemployment in his community is high. The average age of the population in his community is high The average education level of the population in his community is low.

The average age of the population in his community is high

Business strategy defines

The way a firm competes in a particular industry or market The way a firm establishes a competitive advantages over its rivals within a specific industry or market

A firm successfully implementing a differentiation strategy would expect To have high levels of power over suppliers Customers to be sensitive to price increases Customers to perceive the product as standard To charge premium prices

To charge premium prices

Before the firm decides what products to offer and what benefits and features they will have. The firm must decide all the following questions EXCEPT What needs the firm should satisfy When the customer's needs should be satisfied What core competencies are needed to satisfy customer needs Who the firm should serve

When the customer's needs should be satisfied

When selecting a business level (generic) strategy, the firm must determine all of the following EXCEPT How will the customers need be satisfied Why should these customers needs be satisfied Who is the customer What are the customers needs

Why should these customers needs be satisfied

Two basic assumptions of the resource-based view (RBV) are 1.) resource bundles are _______ across firms, and 2.) resources ________ move easily across firms.

different , do not

True or false ? Strategies essence is to make choices that relate to two basic questions, where and how to compete

false

True or false ? Team based and project based organizations are not considered to be types of structures

false

True or false: Costly-to-imitate capabilities are those which other firms cannot easily develop because they have no strategic equivalent (they have no resources)

false

True or false: Firms can directly control the segments of the general environment

false

True or false: Human resources and other support functions are not value-creating activities in the value chain; only primary value chain

false

True or false: Interpersonal relationships, trust, friendships, and a firm's reputation are all examples of complex social phenomena that makes capabilities easy to imitate

false

True or false: The difference between the cost leadership and differentiation business-level strategies, and the focused cost leadership and differentiation strategies, is their basis for customer value

false

True or false: When firms analyze the external environment, they typically have complete and unambiguous data

false

true or false Differentiation exists only in the early stages of an industry - it is not an option in a mature industry

false

true or false In the effort to negotiate a favorable outcome the negotiators should begin with who has the most power

false

true or falseThe tendency over time has been for life cycles to compress. This is especially true in e-commerce firms and markets

false

True or false ? Some of the main bases for grouping employees within an organization are tasks, products, geography, and process

true

True or false ? The value chain analysis is a tool which allows us to understand the important, the value and the relationships of the elementary constituting the firm's activity

true

True or false: A risk of a focus strategy is that the needs of the customer within a narrow competitive segment may become more similar to those needs of customers in the whole market

true

True or false: A risk of the differentiation strategy is that firm's means of differentiation may eventually not provide value for which customers are willing to pay

true

True or false: A risk of the differentiation strategy is that the firm's means of differentiation may eventually not provide value for which customers are willing to pay

true

True or false: Almost any identifiable human or organizational characteristic can be used to subdivide a market into segments that differ from one another on a given characteristic

true

True or false: Analyzing the internal environment enables a firm to identify what it can do by identifying resources/capabilities

true

True or false: Effective use of the generic business strategies allows the firm to favorably position itself related to the five forces

true

True or false: Generally, the weaker the competitive forces in an industry, the higher the profit potential of the industry

true

True or false: Resources are the source of capabilities, some of which lead to the development of core competencies; in turn, some core competencies may lead to competitive advantage

true

True or false: Understanding how to leverage the firm's unique bundle of resources & capabilities is a key outcome decision makers seek when analyzing the internal organization

true

true or false A firm's life cycle and the stages within it have the characteristics of an S-shaped growth curve

true

true or false A key measure of liquidity is working capital

true

true or false Corporate culture compries the beliefs, values, and behavioral norms of the organization. They are different and have no link with the national culture

true

true or false In general, globalization results in more competition and lower profitability

true

true or false In the life cycle of a team, it will transition through forming, storming, norming, performing

true

true or false Michael Porter has identified five sources of competitive pressure: competition from substitutes, competition from rivals, competition from new entrants, the power of suppliers, and the power of clients.

true

true or false Opportunity costs are the projected benefits received from an alternative not selected

true

true or false Strategy has its origins in military strategy

true

true or false The exact same General Environment issue (e.g., a sociocultural trend toward eating healthier) can be an opportunity for some firms and a threat to other firms

true

true or false The price and availability of ink cartridges for my printer illustrates the relationship of "complementarity" existing between the two products

true

true or false The two factors that lead to conflict are concern for the relationship and the desired outcomes

true

true or false Variable costs are expenses that are uniform per unit of output within a relevant time frame, yet total variable costs fluctuate in direct proportion to the output volume

true

true or false Variable costs needed for the organization to operate known as G&A expenses are also called overhead

true

When the costs of supplies increase in an industry, the low cost leader Will lose customers as a result of price decreases May be the only form able to pay the higher prices and continue to earn average or above average May continue competing with rivals on the basis of product features will be unable to absorb future costs because cost leaders operate on very narrow profit margins

will be unable to absorb future costs because cost leaders operate on very narrow profit margins