MGMT 3000H Review Questions- Lyons
How does Bargaining Power of Customers partially explain the airline industry's historically low ROIC? A) High customer switching costs, meaning customers cannot easily switch to a competing airline. B) Low customer switching costs, meaning customers can switch to a competing airline relatively easily. C) The product and service that the U.S. airlines offer to customers is undifferentiated--i.e., mostly the same, commoditized. D) B and C above
B
How does the Threat of New Entrants partially explain the airline industry's historically low ROIC, as exemplified by its 5.9% ROIC from 1992 to 2006? A) The barriers to entry for new competitors are relatively high, thus keeping out new competition. B) Somewhat surprisingly, perhaps, the barriers to entry for new competitors to enter the airline industry have historically proven insufficient to keep a numerous new competitors from entering the market when times were good and profits available..
B
Only one of the four major U.S. airlines chose not to purchase the 737 MAX airplane from Boeing. Which airline was it? A) American B) Delta C) Southwest D) United
B
Which choice best describes the strategy of Spirit Airlines? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
B) Focused on those not concerned with their comfort or well-being? So low-cost focus.
Those who argue for genetically modifying certain mosquito species into extinction because it will largely end the spread of serious human disease carried by these insects, including the Zika virus and dengue fever, without any great loss to the natural world, are making an argument based on what ethical decision-making framework? A) Fiduciary duty B) Utilitarianism C) Kantianism D) Virtue ethics
B) I could've given a few more facts, and will on the exam, but this view focuses on the benefits outweighing the costs of the action, which is a utilitarian view.
Which choice best describes the strategy of HP and Dell in the personal computer market segment? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
C
How does the Threat of New Entrants partially explain the airline industry's historically low ROIC? A) Relatively high barriers to entry B) Demand-side benefits of scale C) Relatively low barriers to entry D) Customer switching costs E) Supply-side economies of scale
C)
Which choice best describes Apple's strategy? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
C) Differentiation all day long. I know some of you might like to think that you're still part of a relatively small group of rebels against Microsoft or whatever, but that ship has sailed.
Which choice best describes Target's strategy? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
C) I didn't mark any correct answers. I'm not sure. I'm told by the person in my household who shops at ALDI that Target's food is quite expensive. It's kind of a combo differentiation and cost-leadership, maybe? Differentiation from Walmart while still being a value retailer? Email me if you think you know the more precise answer.
Which choice best describes the strategy of Delta Airlines (or United or American)? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
C) I guess differentiation based on large national and international network, appeal to premium business travelers, etc.
Which choice best describes Best Buy's strategy? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
C) I say differentiation based on its use of its brick and mortar stores to distinguish itself from other online consumer electronic retailers. It's a mass retailer, so not focus. For older folks, the use of a store to differentiate is ironic.
Applying the Phase Model for Global Expansion, the _______ strategy is generally seen as the most conservative (both as to risk and potential return), while the _________ strategy is generally seen as the most aggressive (as to risk and return). A) Joint Venture; Exporting B) Exporting; Licensing C) Exporting; Wholly-Owned Subsidiary D) Wholly-owned subsidiary; franchising E) Joint Venture; Franchising
C) The Phase Model is a continuum model, with Exporting being the most conservative--"toe in the water"--strategy on end of the spectrum; and Wholly-Owned Subsidiary being the most aggressive and committed strategy on the other end. The other strategies fall somewhere in between. Have a basic understanding of each.
Others argue against genetic modification of certain mosquito species because genetic modification for the purpose of causing the extinction of a species is akin to "playing God" and not a practice that humanity wants to see become a widespread practice. Those with this view are making an argument based on what ethical decision-making framework? A) Fiduciary duty B) Utilitarianism C) Kantianism D) Virtue ethics
C) This question shows the powerful check that Kantianism can be against a purely utilitarian approach. It requires you to ask yourself, if what you're about to do were to become a universal law--if everyone did what you're trying justify doing "just this once," would that be suitable as a universal practice.
Which choice best describes Starbuck's strategy today? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
C) Today, Starbucks feels almost as ubiquitous as McD's when traveling on the Interstates. But I still see substantial differentiation with all its nitro coffees and myriad other specialty drinks, and the stores themselves.
Applying a SWOT analysis, which of the following represents WMI's greatest opportunity? A) Leveraging its brand recognition, market position, and resources to increase its landfill capacity. B) Leveraging its brand recognition, market position and resources to become a leader in the collection and disposal of solid waste in landfills. C) Leveraging its brand recognition, market position, and resources to become a leader in waste recycling. D) Leveraging its brand recognition, market position, and resources to become a leader in the use of electric garbage trucks.
C) WMI does have significant brand value and resources, and certainly appears to have the opportunity to change to meet customer expectation for recycling.
When Apple became dissatisfied with retail outlets through which its products were sold, Apple opened its own company retail stores for the sale of its products. This is an example of ______________. A) Unrelated diversification B) Backward vertical integration C) Forward vertical integration D) Related diversification
C) While Delta moved backward in it supply chain, Apple moved the opposite direction on its supply chain toward the customer, which is forward vertical integration. Apple is a fairly integrated company in my judgment, though not fully integrated, in that it does not manufacture its products. But it designs its hardware, creates it own software (unlike many other tech companies), and distributes its products in its stores and on its websites (and on Amazon and at Best Buy, etc.)
Which choice best describes Verizon's strategy? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
C)To me, this is clear enough to be a test question if you know anything about Verizon (no, I won't rely on you knowing about a particular company on the exam). Verizon is the high-cost provider claiming to provide the most comprehensive cell coverage. But also the largest provider by paid customers.
Which choice best describes Mercedes-Benz's strategy? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
C/D) I tend to think focus is the better answer. This might be a function of where you grew up. It you grew up in a relevantly affluent area, it could just be that it seemed like everyone had a Mercedes, thus leading you to differentiation. On the other hand, when you're the name sponsor of the Georgia Dome and the Superdome, maybe your strategy is a more broadly-based market appeal consistent with differentiation..
Which choice best describes the strategy of the clothing brand Patagonia? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
C/D) The textbook presents Patagonia as an example of differentiation, which it certainly is. But I see Patagonia's strategy as more specifically labeled as differentiation focus, given its CSR focus and super-high prices that it asks for its products, as compared to even other similar clothing brands like Marmot, Northface, etc.. This just may be my perception, but Patagonia seems more like focus to me.
Which choice best describes Subaru's strategy? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
C/D) This may not be a great question, as I don't think of Subaru as a low-cost manufacturer (though some of you may). I see it as differentiation focus, targeting a certain kind of consumer with its "Love" campaign, safety, crunchiness, granola, etc. Though I will say that in the mountains of NC and Montana, Subarus are everywhere.
How does the Threat of Substitutes explain the airline industry's historically low ROIC? A) Products in other industries satisfy the same transportation need B) Products in other industries make air travel less necessary for certain customers. C) Airlines are subject to disruptive innovation D) The threat of substitutes was relatively low during the period of 1992 - 2006, and arguably was the most favorable of the 5 forces for the airline industry (i.e., if you needed to travel from NY to California, what were your practical options?)
D
Which choice best describes Genzyme's strategy as described in the mini case in Ch 5? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
D) By focusing on "orphan drugs" with small patient populations, Genzyme's strategy is best described as focus (and more specifically as differentiation focus).
As discussed in my lecture, Apple's iPhone has a substantial and highly-profitable market share in a market--the smartphone market--that is maturing and experiencing substantially lower growth. Applying the BCG Matrix from the slides and my lecture, this suggests that the iPhone has become a ______ for Apple. A) Dog B) Question Mark C) Star D) Cash Cow
D) See slide 34 of the posted PowerPoint slides in which a cash cow is a company or business with a large relative market share in a low-growth, maturing market.
Which strategy choice best describes Starbuck's second phase, in which it expanded into large cities in largely affluent urban areas? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
D) Starbucks initially expanded into larger urban areas and catered to mostly upwardly-mobile professionals willing to spend several dollars on coffee. The entire world did not immediately embrace the idea of going from 25 cents to several dollars for coffee products. This looks to me like differentiation focus.
Suppose Yang is talking to fellow intern, Steve, who says because the company has asked all of the interns to do as Yang's boss has asked (not reveal his connection to the company), and pretty much all of the interns plan to do as the company has asked, Steve is going to go along and do as the company has asked as well. Yang, on the other hand, has decided that he does not really care what all of the other interns are doing, that his integrity is more important to him than the internship, that he does not want to start out his career in this industry lying to many of the main players in the industry, and that he wouldn't want to work for a company that would put a college student in this position anyway. Applying Kohlberg's Stages of Moral Development, Steven appears to operating at the _____level, while Yang arguably is operating at something closer to the ________ level. A) Preconventional; Postconventional B) Postconventional; Coventional C) Conventional; Preconventional D) Conventional; Postconventional
D) Steven is following the convention and conforming to the social expectations of his role as an intern at this company. Yang on the other hand is unconcerned with such matters, and is instead focused on more universal ethical principles that he would like to apply to his life and career.
Which choice best describes the strategy of Under Armour's gambit into high-end clothing? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
D) This pretty clearly looks like differentiation and focus given the expensive nature of its clothing.
Applying a SWOT analysis, what is one of WMI's greatest weaknesses? A) Lack of permitted landfill capacity B) Poor brand recognition C) Inefficient waste disposal operations D) Inability to recycle waste efficiently and profitably E) All of the above.
D) This the major challenge facing WMI, as recycling doesn't seem to be WMI's area of strength.
Which element of WMI's internal environment appears to be the most problematic for WMI? A) Owners B) Board of Directors C) Employees D) Culture
D) You might've said board of directors, but culture probably best captures all of the resistance and rigidity of the company toward change from its business model.
Which choice best describes Whole Foods' strategy before the Amazon acquisition (and maybe after, I just don't know)? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
D/C) I say differentiation focus, though I marked differentiation as correct as well to keep everyone happy. I still think of Whole Foods as niche retailer despite its size, targeted at those who want to pay $5.00 for a $2.00 gallon of milk ;-)
Which choice best describes Tesla's strategy? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
D/E) Seems fair to say first-mover/blue ocean to start, which arguably has developed into differentiation focus at this point. I still don't see Tesla as a big enough brand and seller to be just differentiation (yet). Still appealing to a certain slice of the market, to my eye.
Relatively speaking, as we sit here today, is the U.S. Airline industry currently cycling through a stable or dynamic environment?
Dynamic - Hard to think of a more dynamic environment than in the midst of the pandemic, especially for the airline industry (as we have and will talk about).
Relatively speaking, as we sit here today, is the oil and gas industry currently cycling through a stable or dynamic environment?
Dynamic- Exxon was just removed from the Dow Jones Industrial Average, where it had been since 1928. Oil prices plummeted as the pandemic took hold, and who knows what's next for the fossil fuel industry.
How does Bargaining Power of Suppliers partially explain the airline industry's historically low ROIC? A) Widespread unionization of labor B) Sensitivity to jet-fuel prices and dependency on jet fuel (as scarce resource) as a primary operating cost C) Necessity of continually purchasing new airplanes D) Intense competition for finite number of gates, terminals, and "slots" at strategically-key airports E) All of the above
E
How does the Bargaining Power of Suppliers partially explain the airline industry's historically low ROIC? A) Widespread unionization of labor B) Sensitivity to jet-fuel prices and dependency on jet fuel as a primary operating cost C) Necessity of continually purchasing new airplanes D) Intense competition for a finite number of gates and terminals at strategically-key airports E) All of the above.
E)
How does the Threat of Substitutes explain the airline industry's historically low ROIC? A) Competitor's product satisfies the same transportation need B) There is a limit on the airline industry's profit potential because there is a ceiling C) On the prices that airlines can charge D) Airlines are subject to disruptive innovation E) Before the pandemic, the threat of substitutes has been relatively low and does not explain the industry's historically low ROIC. F) All of the above.
E)
Which strategy choice best describes Starbucks in its initial, start-up phase? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
E) Starbucks created a new way of selling coffee as a premium product and an in-cafe experience. No, Starbucks didn't invent the cafe, but it invented it as a business model for large-scale sales of premium coffee products.
Which element of WMI's general environment appears to be the least significant to WMI's business? (article in chapter 2 review)
Economic- Good or bad economy, even in a pandemic, customers aren't giving up garbage pick up. It's a lot like a utility in that way. I'm not saying it's perfectly insensitive to economic conditions--the more stuff you buy from Amazon, the more you need to "recycle." Still, if you've ever forgotten to put your garbage out for pick up for a week or two, you quickly get in touch with why it's not a discretionary service when finances get tight.
How does Bargaining Power of Customers partially explain the airline industry's historically low ROIC? A) High customer switching costs B) Low customer switching costs C) Undifferentiated product and service offered to the customer D) Ability of customer group to potentially integrate backwards to produce the supplier industry's product E) All of the above. F) B and C above
F)
How does Rivalry Among Existing Competitors partially explain the airline industry's historically low ROIC? A) Fixed costs are high, and marginal costs are low B) Industry products or services lack differentiation or switching costs C) Rival competitors are numerous or are roughly equal D) Historically, competitors roughly equal in size and power E) Intense price competition on popular, high-traffic routes F) All of the above.
F)
In the previous questions, what basic concepts and/or duties are we examining with respect to Walmart's payment of store employees and Nike's obligation to foreign workers? A) Distributive Justice B) Procedural Justice C) Corporate Social Responsibility D) Shareholder Theory E) Fiduciary Duties F) Both Distributive Justice and Corporate Social Responsibility
F) Both Nike and Walmart (as well as Merck) are examples of corporate social responsibility--that is, asking "what is the firm's responsibility in those circumstances. And Nike & Walmart also illustrate the principle of distributive justice--how much of Nike's and Walmart's profits, revenues, etc. should be shared with workers, etc.
Which choice best describes the strategy of Samsung in the smartphone industry? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
F) Samsung traditionally has had phones a many price point, from high end to relatively budget-oriented. Some have suggested that Samsung has gotten caught trying to be all phones to all people, thus diluting its brand.
Applying a SWOT analysis, what is WMI's primary strength? A) Landfill capacity B) Recycling expertise C) Expertise collecting and disposing of solid waste in landfills D) Managing its relationships with environmental groups E) All of the above F) A and C above.
F) WMI has built its competitive advantage around landfill capacity and collecting and disposing of solid waste in landfills.
TRUE/FALSE: Microsoft engaging in a campaign to limit its consumption of fossil fuels is a good example of strategic CSR.
FALSE: Consumption of fossil fuels has almost nothing to do with Microsoft's business, as opposed to FedEx, UPS, etc. Indeed, it's "products" never even make it into the physical domain. This is just good corporate citizenship.
TRUE/FALSE: Walmart creating a general education scholarship fund is a good example of strategic CSR.
FALSE: This is not a good example strategic CSR, as a general education scholarship is not particularly connected to Walmart's business as a general retailer. It looks more like just good corporate citizenship.
True/False- There is no significant relationship between the customer element of WMI's task environment and the sociocultural aspect of WMI's general environment.
False- Zero waste, recycling and generally not liking landfills are all changing societal values that fall squarely within the sociocultural dimension of WMI's general environment. And these sociocultural dynamics directly impact the expectations and behavior of WMI's customers--e.g., reducing waste and demanding recycling. We see the same relationship between the sociocultural and customer behavior with McDonald's and Coca-Cola--changes in societal views of healthy and poor dietary habits, and customer behavior.
Applying the Strategies for Going Global, which strategic approach for global expansion has Apple taken in taking the iPhone global, particularly in China? A) Global consistency B) Local adaptation C) Multinational strategy D) Global strategy E) International strategy F) All of the above G) A and D above H) B and C above
G) As discussed in the video lecture, Apple, to the extent possible, manufactures and sells the same products around the globe, without substantially altering its products for a particular market more than it is required to (e.g., China with respect to customer data, perhaps). This reflects a basic philosophy of "global consistency," and global strategy for Apple's international business.
Each of these companies (GE,3M,Danaher, berkshire hathaway) is an example of ______________. A) Unrelated diversification B) Conglomeration C) Backward integration D) Vertical integration E) Single-product strategy F) All of the above G) A and B above. H) B and C above.
G) Each of these companies reflects unrelated diversification in their collection of business, and each is therefore also a good example of conglomeration.
Delta Airlines' merger with (acquisition of) Northwest Airlines in 2008 was an example of ______________. A) Unrelated diversification B) Backward vertical integration C) Forward vertical integration D) Related diversification E) Horizontal diversification F) All of the above G) D and E above
G) It's related diversification because Northwest obviously shared a similar set of resources; and it's horizontal because both companies occupy the same place in the supply chain.
Applying a SWOT analysis, which of the following represents a significant threat to WMI's existing business model? A) Lack of permitted landfill capacity B) Poor brand recognition C) Declining customer demand for landfill waste disposal. D) Increasing customer expectation of greater waste recycling and less landfill waste disposal. E) Pressure from environmental groups for waste disposal that is environmentally sensitive. F) All of the above. G) C, D and E above.
G) This answer should, I think, be pretty clear at this point. There are WMI's weaknesses.
WMI: General Environment: Economic (choose two correct answers) Threat Opportunity Neutral Level of Importance: High Level of Importance: Medium Level of Importance: Low
Neutral, low: As discussed previously, WMI's business would seem to be relatively insensitive to economic conditions, as its service functions somewhat like a utility that customers would have a tough time dropping. So I would say it's neither threat nor opportunity exactly. I'm not saying the business is completely immune to economic conditions, as greater economic activity presumably results in greater waste creation need for WMI's service.
In 2012, a local grassroots movement successfully blocked Walmart from opening a store in downtown Athens. This was a good thing for downtown and the community. a- strongly agree b- agree c- neutral d- disagree e- strongly disagree
No "correct" answer here, of course. Typically, the sentiment is pretty heavily on the "agree" side of the ledger. And that was precisely the problem for Walmart during that period of time. I will save the rest of my analysis for feedback in the next question.
Looking back over the past 20 years or so, has the U.S. beer industry generally been cycling through a stable or dynamic environment?
Pretty dynamic, I'd say. When I was in college (more than 20 years ago, admittedly), there was no such thing as "craft beer." It was Anheuser-Busch or Miller beers. Maybe Coors and very few others. Sam Adams was the first craft been I know about. Now, I can think of two bars just in Athens where you can't get anything but a craft beer. Plus, Americans apparently are drinking less beer. It's arguably stabilized somewhat, with craft beer feeling like it's now king, at least from my vantage point (I've not researched the industry lately).
Under the Resource View of Sustainable Competitive Advantage, a firm's resources must have four characteristics in order to create a sustainable competitive advantage. Name the four characteristics.
The resources comprising a sustainable competitive advantage must be: 1) Rare 2) Valuable 3) Non-imitable (not easily copied) 4) Non-substitutable (there are not other resources that can serve as substitutes--think "Threat of Substitutes in Porter's 5 Forces).
WMI: General Environment: Sociocultural (choose two correct answers) Threat Opportunity Level of Importance: High Level of Importance: Low
Threat, High: The changing customer behavior and expectations fall with the sociocultural domain of WMI's general environment, these changes are a threat, and they go directly to customer demand and expectations for WMI's service, which represents a threat of high importance.
WMI: General Environment: Technological (choose two correct answers) Threat Opportunity Level of Importance: High Level of Importance: Low
Threat, High: The technology is recycling, which at the time of the case represents a threat of high importance for WMI,
WMI: General Environment: Political/Legal (choose two correct answers) Threat Opportunity Level of Importance: High Level of Importance: Medium Level of Importance: Low
Threat, Medium: WMI's struggles with environmental groups look to fall in the political/legal domain of WMI's general environment. It seems like more of a threat at the time of case, and I added a level of importance because it doesn't seem as important as pressing an issue as the other identified threats. (And no, this would not be a good exam question; don't lose your mind if you didn't get it perfectly correct or you disagree of level of importance. The idea is to get you thinking about and applying the concepts; exam questions will be much more precise.
T/F- The television and broadcast entertainment industry currently is undergoing disintermediation.
True- Taking Disney as but one example, with the Disney+ streaming service, it now creates, produces and distributes its product directly to the end user all by itself. I'm not sure it's possible to get more disintermediated than that. And all because of technology (and because Netflix was so successful with Disney's product). Of course, we're seeing a number of major content producers try to do this today--NBC, HBO, CBS, Discovery, ESPN+, etc. One wonders how many streaming services one will have to subscribe to in the future. Wouldn't it be cool if there was a service that took all this content, organized it into channels, and made it all available in one place... :-)
T/F The recorded music industry has undergone disintermediation in the last two decades.
True- The recorded music industry has undergone radical disintermediation as a result of technological innovation. The economics of the industry are mostly bad from the artist's standpoint. Look, just own it; no fairy tales. If you're getting access to basically every song ever recorded for $5.00 a month (plus Hulu, plus Starz or whatever), when I used to pay $15 for one CD (those would be 1993 dollars), the revenue to the producers of the music can only be reduced (dramatically). Porter's 5 Forces would say bad industry structure.
T/F- The technological element of WMI's general environment has become a significant and important issue for WMI's business.
True- There is, in my view, a technological gap between what the public wants recycled and what the industry can practically recycle. And WMI at the time of the case had not built its business at all on recycling.
T/F In certain respects, the U.S. beer industry has recently undergone disintermediation.
True- You can now go to Creature Comforts and buy beer directly from the brewery for personal consumption. Direct from the source--no distributor, no retail outlet, no bar or restaurant. That was not a remote possibility a few years ago (you had to take a "tour" just to have a beer at the brewery). We're seeing more and more brew pubs and the like. This is the very definition of disintermediation, though it is not the result of technological change so much as regulatory change. The laws in Georgia and other states have slowly changed to allow this new business model.
WMI: Internal Environment: Recycling Capacity (choose two correct answers) Strength Weakness Level of Importance: High Level of Importance: Medium Level of Importance: Low
Weakness, High: This weakness at the time of the case is why the technological and sociocultural dimensions of WMI's general environment look so much like threats.
WMI: Internal Environment: Organizational Culture (choose two correct answers) Strength Weakness Level of Importance: High Level of Importance: Medium Level of Importance: Low
Weakness, High: WMI's culture looks like a weakness at the time of the case given WMI's changing external environment and need to adapt.
Identify the three elements of Porter's Diversification Test. (Yes, that Porter. Who else?) a- Attractiveness Test b- Cost of Entry Test c- Synergy Test d- Relatedness Test e- Better-Off Test f- Matrix Test
a/b/e) The answer is found in slide 30 of the posted PP slides--1) Attractiveness Test; 2) Cost of Entry Test; and 3) Better-Off Test.
The banking industry . . . a- Has undergone disintermediation. b- Is undergoing disintermediation. c- Is facing the prospect of disintermediation
c- As I'll probably mention in class, it looks like "Big Tech"--Google and others--are looking to move into banking, and you have to think that some disintermediation of the traditional banking model looms on the horizon.
Which element of WMI's task environment appears to be the most concerning/threatening to WMI's business? (article in chapter 2 review)
customer- From the info given in the case, competitors and suppliers don't seem particularly threatening. But customers are moving toward reduced/zero landfill and demanding recycling of everything, no matter how (un)realistic that still may be.
What are the components of environmental uncertainty? a- Environmental complexity b- Stable vs. Dynamic environment c- Environmental Change (i.e., rate of change in contextual factors) d- The number and intensity of contextual factors in the external environment. e- All of the above.
e
Please place the correct Element of the Strategic Framework in the numbered boxes in the image above--e.g., 1 = Strategy Formulation (note this is not the correct label for Box 1)
1 = External Analysis (Porter's 5 Forces, SWOT) 2 = Internal Analysis (SWOT) 3 = Vision & Mission 4 = Objectives 5 = Strategy Formulation 6 = Strategy Implementation
Correctly label the six elements in the figure
1 = Global and Ethical Context 2 = Strategy 3 = Organizational Design 4 = Leadership 5 = Control 6 = Strategic Control
Which choice best describes Walmart's strategy? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
A) Gotta be low-cost leadership given its mission statement and massive market breadth and reach.
Which choice best describes the strategy of Southwest Airlines? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
A) Smallest of the big four, but branded as a better value, whether true or not.
Concept Review Question. Suppose Yang went back to his supervisor and said, look, I'm worried there are ethical ramifications to what you have asked me to do that could be damaging to the company, and to my career, with very little ultimate benefit to anyone. Yang would be making an argument based on __________. A) Utilitarianism B) Kantianism C)Fiduciary Ethics D) Corporate Social Responsiveness
A) Yang is focus on consequences, and making an argument weighing the harm against the benefit of the proposed action, which is utilitarianism.
Which choice best describes Vanguard Mutual Fund's strategy as described in the mini case in Ch 5? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
A/B) I marked both low-cost choices as correct because it depends on your time frame. At one time, Vanguard would have been low-cost focus. Today, it might be the largest mutual fund company in the world. So hard to call it focus anymore.
Which choice best describes the strategy of ASUS in the personal computer market segment? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
A/B) Some sort of low-cost strategy for sure. Probably focus, but maybe leadership.
Which choice best describes the strategy of Chinese companies Xiaiomi and OnePlus in the smartphone industry? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
A/B) The answer when I first asked this question was pretty clearly low-cost focus. And it probably still is. But I'm not sure of their market share at this point, and they could've progressed to plain old differentiation.
Which choice best describes T-Mobile's strategy before its merger with Sprint? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
A/B) This one is a close call. I think as your read about T-Mobile's evolution from 2013 forward, it started out as low-cost focus, but maybe ended up low-cost leadership. Interested in what you think when you read the articles.
Which choice best describes Mitsubishi's strategy? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
A/B) You could probably say either low-cost strategy, but when I survey the class, no one ever raises their hand as owning a Mitsubishi. I say focus based on the still relatively small customer group.
Which choice best describes General Motors (GM)'s strategy? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
A/C/F) I don't have a good read on GM's strategy. I don't have a clear picture of its market position today. And maybe it's a little unfair because GM owns Chevrolet, Cadillac, GMC Trucks. Better question might've been to ask about those specific badges, though I'm still not sure I have a clear picture for those.
Two airlines made the the list of Top 20 Most-Disliked Airlines in the US. Can you guess which two? A) American B) United C) Delta D) Frontier E) Spirit F) Southwest
B, E: Interesting that at a time (pre-pandemic) when the airline industry was performing at its historical best, two airlines still would be named to the list of most disliked U.S. companies. No great lesson in this, just interesting to me.
Sue and John are in a management meeting debating the ethical merits of the foregoing policies (tobacco testing and weighing of applicants, employees and spouses). John says it's not even a close call. Smoking and obesity are bad for the employees, bad for their spouses, anti-social, expensive for the employees, and impose greater costs on society and the company in the form of increased absenteeism, more frequent work breaks, and increased medical and health insurance costs. And there's no material benefit to anyone from smoking or obesity, so the calculation is easy: the policies are perfectly justifiable and ethical. Sue is not convinced. She argues that motives and reasons for an employer's intrusion into its employees' private lives matter, and that a policy in which an employer intrudes into an employee's private life, and punishes legal behavior that the employer deems objectionable, violates a fundamental principle of privacy and is not a policy that we would want to see become a universal law or practice. Johnny is applying a ______________ framework to ethical decision-making, while Suzy is applying a ______________framework to ethical decision-making. A) Corporate social responsibility; Fiduciary duty B) Utilitarianism; Kantianism C) Kantianism; Utilitarianism D) Utilitarianism; Virtue Ethics
B) John is focused on consequences and a basic cost-benefit analysis, which is utilitarianism. Sue is focused on motives and reasons, and whether we would want to see these employer practices become a universal practice. That is Kantianism.
Which choice best describes Sprint's strategy before the merger? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
B) Low-cost focus, targeting those who don't care if they actually have service in many areas ;-)
The previous question regarding the NFL and potentially disciplining players based only on an allegation of domestic abuse, is most consistent with which of the following concepts? A) Distributive Justice B) Procedural Justice C) Fiduciary Duties D) Virtue Ethics
B) The ethical issue here is about procedural justice--due process. Is it fair, ethical, to take serious disciplinary action against someone based solely on an allegation? Would you want such action taken against you based purely on an allegation? This is question of procedural justice, specifically due process.
At the time of the case, what had WMI built its competitive advantage upon? A) Branding B) Permitted landfill capacity C) Fuel-efficient garbage trucks D) Recycling
B) This is a valuable, rare resource that seems to be be the basis for WMI's competitive advantage. Branding is not a bad second best answer.
Delta Airlines' purchase of an oil refinery in Philadelphia, PA is an example of ____________? A) Unrelated diversification B) Backward vertical integration C) Forward vertical integration D) Related diversification
B) This one hopefully is pretty clear--Delta's moved backward up the supply chain to gain control of a key input for its product/service--jet fuel.
Which choice best describes ALDI's strategy? A) Low-Cost Leadership B) Low-Cost Focus C) Differentiation D) Differentiation Focus E) First Mover or Blue Ocean F) Stuck in the Middle Strategy G) Some other strategy
B) This would be a good test question (assuming everyone knew ALDI). ALDI seems like an excellent, and inarguable, example of low-cost focus. Many of you likely still have never been into ALDI. And it's a serious no-frills (I gather), low-cost grocery shopping experience (some stuff is just left in the shipping crates, for example). It's also on the serious upswing as a company, as I understand it (part of Trader Joe's family, if you're interest in the job posting).
Generally speaking, Walmart has taken a ___ approach to CSR(2), while Whole Foods has taken a __ approach to CSR(2). A) Accommodative; Reactive B) Defensive; Proactive C) Proactive; Accommodative D) Reactive; Defensive
B) Walmart in the case in Ch. 1 is a good example of a defensive approach to CSR2, certainly in comparison to Whole Foods (before Amazon), which took a proactive approach to CSR2, leading its industry in employee relations, food sourcing, community relations, etc.
Suppose Yang went back to his supervisor and said, look, I'm concerned about the ethics of what you've asked me to do. Yang argues that motives and reasons matter, and that a practice of not completely and accurately disclosing his connection to the company violates a fundamental principle of honesty and transparency, and is not a policy that anyone would would want to see become a universal law or practice. Yang would be making an argument based on __________. A) Utilitarianism B) Kantianism C)Fiduciary Ethics D) Corporate Social Responsiveness
B) Yang is focusing on fundamental duties and the law of universality, which is Kantianism
Relatively speaking, as we sit here today, are the computer and mobile phone industries (i.e., manufacturers of computers and mobile phones) currently cycling through a stable or dynamic environment?
Stable- My answer to this would've been different when I first started teaching this class. The iPhone absolutely was, and the iPad seemed like it would be, utterly disruptive of so many companies and industries, it felt for awhile like we'd be in a dynamic cycle with technology forever. But not so. I know many of you answered dynamic, but you're just not seeing it yet. I have a Samsung S5 (yeah, that's right, what of it). And it does everything your iPhone 27s or whatever that cost you $1,000 can do. We now have what we would call dominant design (you couldn't tell if I had an iphone or android from more than about 20 feet because they're all the same), and we're seeing what we'll label incremental rather than radical or disruptive change. Which is when companies like Apple cash in, as they have done. Same with computers. Dominant design for laptops, certainly--they've been mostly the same for 20 years--and your iPad, which was going to be the laptop killer, kinda turned out to be a fad, seems to me. I mean, when the chips are down, what serious work do you do on an iPad? But, that stability will not last forever. It never does. Interestingly, I would guess the smartphone industry has been largely unaffected by the pandemic. We were addicts before; we're addicts now, so to speak. Can't say that about many industries.
WMI: Internal Environment: Landfill Capacity (choose two correct answers) Strength Weakness Level of Importance: High Level of Importance: Medium Level of Importance: Low
Strength, High: This is a rare and valuable resource and seems to be the basis for WMI's competitive advantage at the time of the case. It obviously remains important, especially if your prof is right and recycling turns out to be more theory and hype right now than practical reality.
WMI: Internal Environment: Waste Collection & Disposal (choose two correct answers) Strength Weakness Level of Importance: High Level of Importance: Medium Level of Importance: Low
Strength, High: This is the core of WMI's business at the time, and remains important therefore.
TRUE/FALSE: The airline industry is experiencing a strategic inflection point as a result of the coronavirus pandemic.
TRUE: NOTE: The concept of strategic inflection point is directly out of the Ch. 4 slides and my lecture. Maybe we're all experiencing a strategic inflection point as a result of the pandemic--higher education and countless other industries. It's always hard to call something like this when you're in the midst of it, which we still are. The airline industry could completely recover and be unchanged in a few years. But my instinct says this is a strategic inflection point for the industry--the fundamentals of the industry have changed. And NO, this would not be a good exam question, so relax if you did not choose the "correct answer," because only time will tell what the correct answer will be. Maybe just be glad I've pointed this concept out to you so you'll be ready for the exam.
TRUE/FALSE: As the two articles above illustrate, the T-Mobile--Sprint merger is an excellent example of the two primary strategic reasons for most mergers and acquisitions (i.e. horizontal diversification).
TRUE: See slides 17 - 20 (ch.6) of the posted PowerPoint slides if you are uncertain about the answer to this question.
TRUE/FALSE: Walmart's current "Buy American" campaign in which it has pledged to spend a certain amount of money buying goods manufactured in the USA is a good example of strategic CSR.
TRUE: This comes much closer to strategic CSR, as this is a place where Walmart's business intersects in a significant way with society. Walmart was the "poster company" for offshoring manufacturing to China and other countries.
TRUE/FALSE: Sony's smartphone business recently lost approximately $879 million in a recent fiscal year. Nonetheless, Sony enjoys a sustainable competitive advantage in the smart-phone industry.
TRUE: This question is a good indicator of whether you watched and were paying attention to the Ch. 4 video lectures. As discussed in part of the Ch. 4 lecture, although Sony-branded smartphones have not been a profitable business for it, Sony nevertheless enjoys a sustainable competitive advantage in the manufacture of the image sensors that are used in the cameras of high-end smartphones. As discussed in the lecture, Sony's position with respect to the image sensors that Apple and even Samsung (which manufactures image sensors itself) depend upon in the manufacture of high-end smartphones is a textbook example of the Resource View of Sustainable Competitive Advantage.
What is the overarching goal of strategy?
The answer, of course, is to attain a competitive advantage; ideally, a sustainable competitive advantage.
When fuel prices were both volatile and sky high before 2014 and the oil and gas industry was profiting as much or more on the airline industry than the airlines were, which of the following strategies did Delta Airlines adopt to deal with this resource scarcity and complicating environmental factor? a- Engaged in fuel-price hedging by which it locked in fuel prices. b- Experimented with alternative-fuel airplanes. c- Purchased an oil field. d- Invested heavily in state-of-the-art, fuel-efficient airplanes. e- Purchased an oil refinery. f- A and E above are true.
f- Delta had fuel-price hedges like some other airlines. This was great protection for rising fuel prices, but a quite negative thing when prices plummeted in 2014. Delta was locked in at the higher prices for a period, while some of its competitors were not. But Delta also took the radical step of purchasing a jet fuel refinery plant, bring a plant near Philadelphia out of mothballs to refine jet fuel. This is what we'll call backwards vertical integration in Chapter 6--moving backward on the supply chain closer to the inputs. Again, the plummeting fuel prices in 2014 did not make that move look as brilliant as it otherwise might have. I believe Delta divested ownership of the refinery at some point.
Based on the description in the Walmart Case (p.5), which of the following statements is true? a- The contextual forces in Walmart's environment created greater uncertainty for Walmart. b- Wal-Mart did a credible job of building contextual intelligence. Stakeholder management was irrelevant to Walmart's challenges. c- Walmart seemingly did not understand the impact of certain stakeholders on its business. d- None of the above. e- All of the above. f- A and C only are true.
f- Poor stakeholder management and a lack of contextual intelligence to understand that this issue--communities like Athens opposed to Walmart stores locating in the community--which we'll label as originating in the sociocultural dimension of Walmart's general environment, resulted in a dollars and cents business problem. That is, when you can't get your stores in the places that you think are most strategically advantageous to have them, that's a social issue turned dollars and cents business problem. I was not a regular customer of Walmart, not involved in its supply chain, and was not a stockholder. Yet when Walmart sought to put one of its giant stores in my community (which I strongly opposed as it related to downtown Athens), I was impacted and I became a stakeholder of Walmart. Walmart seemingly took years to appreciate and respond to this dynamic