Mgmt 475: Test 1
A consolidated industry structure: a. consists of a large number of small companies b. can be seen in agriculture, dry cleaning, health clubs, and real estate brokerage c. consists of few companies that are in a position to determine industry price d. provides no scope for oligopoly to exist e. is characterized by low-entry barriers and commodity-type products
c
A group of firms manufactures writing implements such as pens, pencils, and markers. This group should be referred to as a(n): a. substitute b. market segment c. service provider d. regulator e. industry
e
Demand reaches total saturation in the _________ stage of the industry life cycle a. embryonic b. growth c. shakeout d. maturity e. decline
D
Ray, a toymaker, knits a stuffed unicorn for Belle. Which function of the value chain is illustrated in this scenario? a. Marketing b. Distribution c. Research d. Production e. Sales
D
One of the primary roles of human resources in achieving superior efficiency is: a. facilitating cooperation among various value creation functions. b. adopting aggressive marketing to ride down the experience curve. c. designing products for ease of manufacture. d. using information systems to automate processes. e. implementing self-managing teams.
E
Self-managing work teams: a. increase per-unit costs of manufactured items. b. perform all workplace tasks except the making of hiring decisions. c. increase the cycle time of manufacturing items. d. require team members to learn only one task and specialize in that alone. e. tend to increase productivity and product quality.
E
T/F: The final component of the strategic management process is crafting the organization's mission statement, which provides the framework or context within which strategies are formulated.
False
T/F: The mission of a company lays out some desired future state and articulates what the company would like to achieve
False
T/F: The more commodity-like an industry's product is, the lower the intensity of any price war that may develop
False
T/F: The price a company charges for a good or service is typically more than the utility placed on that good or service by the customer
False
T/F: The punctuated equilibrium view can be described as a freezing, but not unfreezing, process in an industry's life cycle
False
T/F: A benefit of long-time customer loyalty is the free advertising that customers provide for a company through referrals.
True
T/F: Intense rivalry lowers prices and raises costs
True
A company's competitive advantage will not endure for long when that competitive advantage can be: a. quickly or easily duplicated by other companies. b. protected by patents. c. protected by significant barriers to imitation. d. shared with other companies in the industry. e. shielded by copyrights.
A
A company's hiring strategy: a. directly affects employee productivity. b. has little effect on employee productivity. c. does not relate to profitability. d. is not part of the company's overall human resource strategy. e. upgrades an employee's skill level.
A
A component of strategy implementation is: a. designing the best organization structure, culture, and control systems to put a strategy into action. b. providing the number and kind of periodic reports that must be submitted by functional-level managers. c. defrning the goals and objectives of the organizations. d. answering the question, "What is our business?" e. eliminating the feedback loop.
A
A video game console manufacturer hired scientists and engineers to work on ways to improve the video cards used in their game systems. The main aim of the manufacturer was to enhance the utility of the products, as perceived by the customers, above that of its rivals. This company aims to: a. achieve superior innovation. b. maintain a low cost position. c. increase response time. d. achieve a greater division oflabor. e. minimize the time to market.
A
An industry can be define as a group of: a. companies offering products or services that are close substitutes for each other b. manufacturing plants of a single company c. different kinds of companies that are abased in the same geographic location d. companies that are different but generate similar amounts of revenues e. brands that offer different products but are owned by a single firm
A
Anna bakes cookies for about $10 per batch, she charges customers $15 to a batch, and customers perceive that the cookies are worth $25 per batch. Anna's profit margin is: a. $5. b. $7.5. c. $10. d. $15. e. $25.
A
As an industry enters the decline stage: a. growth becomes negative b. rivalry among established companies usually decreases c. competitive pressures abate d. capacity reduces e. demand remains the same
A
Competitive advantage is based on: a. distinctive competencies. b. the Icarus paradox. c. higher cost structure. d. prior strategic commitments. e. barriers to change in a company.
A
Dale's methods of fitting horseshoes save time and money for his employer at the local ranch. However, when Dale suggests that everyone use his method, his boss, Cedric, says, "No. That's not the way we've always done it around here." Cedric's resistance to change illustrates: a. organizational inertia. b. prior strategic commitments. c. barriers to mobility. d. lack of distinctive competencies. e. the Icarus paradox.
A
Edward Wrapp's ideas about the astuteness of power suggest that successful strategic managers: a. act as members of a coalition or its democratic leaders rather than as dictators. b. usually have little control over resources that are important to the organization. c. maintain tight control over as many decisions as possible by demanding complete obedience. d. publicly commit themselves to bold strategic agendas whether or not they are rational. e. recognize the futility of pursuing intended strategies.
A
Factors that make it difficult for a competitor to copy a company's distinctive competencies are known as: a. barriers to imitation. b. marketing know-how. c. technological know-how. d. support activities. e. capabilities.
A
Good strategic leaders: a. possess a willingness to delegate and empower subordinates. b. control all facets of decision making. c. make decisions without consulting others. d. ensure uniformity of purpose through the authoritarian exercise of power. e. are usually inconsistent in their approach.
A
If a product is to be properly commercialized, there must be integration between: a. research and development and marketing. b. R&D and materials management. c. marketing and materials management. d. finance and marketing. e. marketing and after-sales support.
A
Kodak possesses the leading imaging technology. This technology has allowed the company to differentiate its products from those offered by rivals. Imaging technology is Kodak's: a. distinctive competence. b. profit. c. support activity. d. value chain. e. retired product
A
Market segments are groups of: a. customers within a market that can be different from each other on the basis of their distinct attributes and specific demands b. companies within a market that produce similar goods or services which are close substitutes of each other c. companies that follow a similar business model and cater to the needs of similar customers d. closely related industries e. large companies that are in a position to determine industry price
A
Mike, the CEO of a retail chain, wanted to keep costs low. To set an example for others, he drove his own car and furnished his office with plain, metal desks. In this case, Mike was displaying: a. commitment. b. ego. c. astute use of power. d. devil's advocacy. e. autocratic leadership
A
One of the most widely used measures of financial performance is: a. return on invested capital. b. net profit margin. c. share value. d. net sales. e. productivity.
A
One of the principal factors that helps increase shareholder value is: a. profitability. b. risk factors. c. low brand awareness. d. government regulations. e. high production costs.
A
Philip Morris capitalized on the growing health consciousness trend when acquired miller brewing company and the redefined competition in the beer industry with its introduction of low calorie beer (Miller Lite). This health trend represents a ______ force a. social b. political c. legal d. technological e. demographic
A
Porter's five forces model did not recognize one force, which is: a. the power of complement providers b. the risk of entry by potential competitors c. the intensity of rivalry among established companies within an industry d. the bargaining power of suppliers e. the threat of substitutes
A
Research and development (R&D) can help a company improve quality by: a. designing products that are easy to manufacture. b. pursuing economies of scale. c. developing strategies on how to market products. d. upgrading employee skill levels. e. creating teams whose members coordinate their own activities.
A
Research and development activities are concerned with: a. design of products. b. distribution of goods. c. customer services. d. analyzing financial performance. e. marketing of products.
A
Scenario-based planning is a technique for coping with the problem of: a. uncertainty. b. planning equilibrium. c. bottom-up planning. d. strategic fit. e. cognitive bias.
A
Suppliers in an industry are most powerful when: a. there are few substitutes for the products they sell b. switching costs are low c. companies in the industry threaten to enter the suppliers' industry d. their profitability is significantly affected by the purchases of companies in a particular industry e. they refrain from entering their customers' industry because of lack of resources
A
Ted is an accountant at ABC Company. He calculates the difference between total revenues and total costs before tax. Ted calculates the: a. net profit. b. capital turnover. c. cost of goods sold. d. return on sales. e. invested capital.
A
The ________ argument states that companies find it hard to change their strategies and structures to adapt to changing competitive conditions. a. inertia. b. imitation. c. barriers to mobility. d. lack of resources. e. lack of capabilities.
A
The concept of quality applies to: a. all products produced by a finn. b. products consumers believe to be high-quality; not low-quality. c. only those products of a finn popular among a large customer base. d. custom-made products only. e. only those products that have been redesigned.
A
The failure rate of innovative products is: a. high. b. low. c. nil. d. moderate. e. too difficult to assess.
A
The first component of the strategic management process is: a. crafting the organization's mission statement. b. corning up with a damage control plan. c. analyzing the macroenvironment. d. determining the firm's employee turnover rate. e. deciding on a fit between the organization's strengths and weaknesses and the environment's opportunities and threats.
A
The internet is an example of a: a. technological force b. social force c. macroeconomic force d. demographic force e. global force
A
The ratio of net profit to invested capital is known as: a. return on invested capital. b. return on sales. c. capital turnover. d. cost of goods sold. e. sales, general, and administrative expenses.
A
The scenario approach to strategic planning involves: a. devising plans for coping with a number of different possible future states of the world. b. designing the best organization structure and the best culture and control systems to put a chosen strategy into action. c. functional managers setting key corporate objectives. d. anticipating the reoccurrence of problems that were previously encountered and designing solutions accordingly. e. designing plans for problems that the company believes will most certainly face in the near future.
A
Using the value chain model, which of the following primary activities is performed first, as inputs are transformed into outputs? a. Research and development b. Marketing and sales c. Human resources d. Production e. Service and support
A
When credit card companies such as Visa and Mastercard allow an individual to put one of their own photos on their account credit card, they are utilizing: a. mass customization. b. a flexible manufacturing system. c. quality as reliability mantra. d. supply-chain management. e. a just-in-time inventory system.
A
Which of the following best defines shareholder value? a. It refers to the returns that shareholders earn from purchasing shares in a company. b. It refers to the capital invested in a company by the shareholders. c. It refers to the efforts taken by a company to sell its shares to prospective shareholders. d. It refers to the efforts taken by a company to buy back its shares from its shareholders. e. It refers to the non-monetary benefits that a company provides to its shareholders.
A
Which of the following cognitive biases refers to the fact that decision makers who have strong pre-existing beliefs about the relationship between two variables tend to make decisions on the basis of these beliefs, even when presented with evidence that their beliefs are wrong? a. Prior hypothesis bias b. Reasoning by analogy c. Illusion of control d. Escalating commitment e. Representativeness
A
Which of the following dimensions is encompassed by a company's business model? a. Configuring resources b. Avoiding focus on acquiring new customers c. Reducing emphasis on product quality d. Maintaining high costs e. Restricting growth
A
Which of the following industry structures consists of a large number of small or medium-sized companies, none of which is an a position to determine industry price? a. fragmented industry b. consolidated industry c. oligopoly d. monopoly e. sector
A
Which of the following statements is true about nonprofit organizations? a. They compete with each other for resources. b. Their ultimate aim is to maximize shareholder value in order to attract risk capital. c. Their mangers needn't develop careful strategies, since making profit is not the organization's goal. d. They do not have to worry about exceeding budgets. e. They seldom set any performance goals like profit-making organizations do.
A
Which of the following statements is true about potential competitors in an industry? a. they threaten the profitability of established companies b. they are usually encouraged by established companies c. they find it easier to enter an industry when the entry barriers are high d. they find it easier to enter an industry when established companies have economies of scale e. they usually have an absolute cost advantage over established companies
A
Which of the following statements is true about the feedback loop in the context of strategy implementation? a. It provides managers the input for the next round of strategy formulation and implementation. b. It emerges within an organization without prior planning, and in response to unforeseen circumstances. c. It cannot reveal whether or not a business model is working. d. It carries information from the corporate level to the functional level management.. e. It indicates that the strategy implementation process has ended.
A
Which primary activity in the value chain is concerned with the design of products and production processes? a. Research and development b. Marketing and sales c. Materials management d. Production e. Company infrastructure
A
_______ consists of the electronic systems for managing inventory, tracking sales, pricing products, selling products, and dealing with customer service inquiries. a. Information systems b. Logistics c. Barriers to imitation d. Benchmark e. Materials management
A
A sector refers to a group of: a. government regulators b. closely related industries c. manufacturing plants of company based in the same location d. business units owned by a single firm e. companies that manufacture similar products under different brand names
B
An impact that the changing industry boundaries have had is that: a. owners of companies can define boundaries b. there is an increase in the number of competitors for companies c. technological changes do not affect companies anymore d. the pattern of customer needs does not affect companies anymore e. the number of product substitutes available for customers has reduced
B
An industry's buyers have high bargaining power when: a. they purchase in small quantities b. switching costs are low c. it is economically impossible for them to purchase an input from several companies at once d. the supply industry depends upon buyers for a very small percentage of its total order e. the industry is a monopoly
B
Beta Corp., a gaming software company, had recently launched a new game. The target audience identified by the company was the age group of 12-18 years. The advertising and marketing strategies were desigued exclusively to target this age group. However, it was noticed that individuals who belong to the age bracket 18-25 years were the ones who would actually buy the game. The managers at Beta Corp. decided to redesigu their marketing strategies to position the game as something that people of all age would enjoy. The company's decision to modify its product positioning demonstrates: a. downsizing strategy. b. emergent strategy. c. deliberate strategy. d. concurrency control strategy. e. unrealized strategy.
B
Common exit barriers include: a. minimal investment in assets like specific machines b. emotional attachments to an industry c. low fixed costs associated with leaving an industry d. the lack of bankruptcy regulations e. economic independence of a company
B
Customer defection rates are: a. not directly related to unit cost. b. an indication of a company's ability to satisfy its customers. c. irrelevant as they are unlikely to impact advertising and marketing costs. d. unlikely to affect sales volumes. e. not affected by cost of products.
B
Distinctive competencies shape the ________ strategies that a company can pursue. a. business-level b. functional-level c. corporate-level d. global-level e. industry-level
B
Donna can make a chair for about $100, she charges customers $150 to buy the chair, and customers perceive that the chair is worth $225. In this case, the consumer surplus is: a. $50. b. $75. c. $125. d. $150. e. $225.
B
Efficiency is: a. defined as the time it takes to produce a product. b. the quantity of inputs required to produce an output. c. independent of customers' perception of a product's value. d. measured by looking at a product's price. e. lower when the output is high-quality.
B
Employee productivity is: a. a function of employee socialization. b. one of the key determinants of a company's efficiency. c. not subject to measurement. d. typically not sustainable in the long run. e. a function that does not affect a company's profitability.
B
Feelings of personal responsibility for a project are most likely to lead to: a. prior hypothesis biases. b. escalating commitment. c. reasoning by analogy. d. representativeness. e. ivory tower planning.
B
Innovation refers to the act of: a. seeking patent protection for new products. b. creating new products and processes. c. measuring time taken for a service to be provided. d. measuring the output produced by an employee. e. identifying and satisfying the needs of a customer.
B
Learning effects are a result of: a. automation. b. knowledge acquired by doing. c. sound product planning tactics. d. diseconomies of scale. e. outsourcing.
B
Managers should not become complacent about efficiency-based cost advantages because: a. both learning effects and economics of scale go on forever. b. the experience curve is likely to bottom out at some point. c. cost advantages gained from experience effects are not affected by the development of new technologies. d. unit costs keep reducing as output increases. e. the experience curve steadily rises after a certain threshold is reached indicating an increase in unit costs.
B
Mike works as a corporate trainer, teaching new employees how to perform manufacturing tasks. In which value chain activity does Mike work? a. Research and development b. Human resources c. Materials management d. Production e. Company infrastructure
B
Mobility barriers: a. allow industries to change their strategy and compete in that strategic group. b. inhibit the movement of companies between strategic groups in an industry. c. inhibit companies from shifting between suppliers for the raw materials. d. are factors that operate outside of an industry. e. exclude the barriers to entry into a group and the barriers to exit from a company's existing group.
B
Philip oversees the processes of the research and development department of his company. He is responsible for all the activities and tasks undertaken by the department. In the context of strategic management, Philip is most likely to be a: a. corporate-level general manager b. functional manager c. managing director d. CEO e. business development manager
B
Quality can best be thought of as: a. a competency in investigating and identifying needs of customers. b. the attributes that customers perceive as superior in a product. c. product development projects driven by customer needs. d. the quantity of inputs that it takes to produce a given output. e. unit cost reductions associated with a large scale of output.
B
Rebecca, a manager, was very annoyed after noticing several negligent errors in a critical report. However, while talking to the subordinate who created the report, Rebecca was calm and composed; she did not act impulsively and lose her temper. Which of the following aspects of emotional intelligence is illustrated in this scenario? a. Self-awareness b. Self-regulation c. Motivation d. Empathy e. Social skills
B
Resources: a. are only the tangible assets available to a company. b. can be both tangible and intangible. c. are harder for a company to copy than capabilities are. d. do not include patents, copyrights, and trademarks. e. are considered valuable only if they increase a company's costs.
B
Roza Munoz oversees the overall operations of Maxwell Coffee House which is one of the divisions of Kraft Foods Company. Roza is also responsible for the overall performance of the business division. Which of the following is not likely to be one of Roza's responsibilities? a. Turning corporate-level strategy into action b. Defrning Kraft Food's mission statement c. Deciding how to compete in the coffee industry d. Supervising functional-level managers e. Developing a business-level strategy
B
Self-managing teams: a. are limited to only very large organizations. b. require members to coordinate their own activities and make decisions. c. typically increase the need for supervisors. d. create a tall organizational structure. e. show negligible increase in productivity and substantial decrease in product quality.
B
The Mountain Ski Lodge spent $100,000 marketing and advertising its new ski trails and on-site spa. The money used for marketing and advertising can be referred to as: a. variable costs. b. fixed costs. c. ratio costs. d. diseconomies of scale. e. economies of scale.
B
The competitive structure of an industry refers to the: a. number of market segments in the industry b. number and size distribution of companies in the industry c. number of consumer in the industry d. number of manufacturing plants in the industry e. number of products produced in the industry
B
The extent of rivalry among established companies is lowest when: a. the industry's product is a commodity b. demand is growing rapidly c. exit barriers are substantial d. the industry is entering a decline stage e. the fixed costs are high
B
The level of industry demand: a. has little effect on competition in the industry b. is one of the determinants of the intensity of rivalry in the industry c. increases when customers exit a marketplace d. does not impact the market share that established companies hold e. decreases the rivalry among established companies, when in decline
B
The threat from potential competitors is the greatest in the ________ stage of the industry life cycle a. embryonic b. growth c. shakeout d. maturity e. decline
B
Unlike traditional manufacturing, flexible manufacturing: a. decreases efficiency. b. lowers unit costs. c. limits an organization's ability to customize products. d. allows the production of only standardized products. e. limits an organization's ability to offer greater product variety.
B
When Rollie's car wash began to lose business to rivals, Rollie read publications for car wash owners to learn the best practices in the industry. Then she implemented the best practices. Rollie is using ______ to improve her car wash. a. specialized assets b. benchmarking c. strategic commitments d. inertia e. the Icarus paradox
B
Which of the following does the philosophy underlying TQM include? a. Greater quantity results in cost decreases. b. Better quality leads to higher market share. c. Greater quantity increases a company's profitability. d. Opinions of employees are irrelevant in manufacturing products. e. Work standards should only be defined as numbers or quotas.
B
Which of the following factors does not determine the durability of a company's competitive advantage? a. Barriers to imitation b. Apathy in an industry c. Capability of competitors d. General level of dynamism in the industry e. The rate of product innovation in an industry
B
Which of the following is not a characteristic of well-constructed goals? a. They are provide a means by which the performance of managers can be evaluated. b. They are lengthy and wordy. c. They specify a time period. d. They are challenging but realistic. e. They address critical issues.
B
Which of the following is true of growth industries? a. they typically have high barriers to entry b. they tend to be characterized by weak rivalry c. they are characterized by low demands d. they increase prices because customers are more aware of the industry's product e. they inhibit the development of distribution channels
B
Which of the following is true of the impact of high product quality on competitive advantage? a. It decreases the utility of the products. b. It lowers unit costs of the products. c. It adversely affects employee productivity. d. It limits the company's ability to differentiate its products. e. It increases the need for after sales services.
B
Which of the following statements is true about emergent strategies? a. They are essentially the strategies that arise from the feedback loops. b. They are also influenced by the kind of culture that the organization's structure and control systems foster. c. They are the strategies that require the least amount of evaluation and strategic thinking from the managers. d. They cannot be combined with intended strategies of an organization. e. They are the product of formal top-down planning mechanisms.
B
Which of the following statements is true about functional-level managers? a. They oversee the operation of an entire company or division. b. Their sphere of responsibility is generally confined to one organizational activity. c. Their activities and roles have no importance in realizing the strategic goals of an organization. d. They provide a link between the people who oversee the strategic development of a firm and those who own it. e. They occupy the apex of decision making within an organization.
B
Which of the following statements is true about rivalry in context of established companies? a. it significantly reduces the costs of established companies b. it squeezes profits out of an industry c. it enables companies to lower their spending on non-price-competitive strategies d. it forces companies to reduce prices when it is less intense e. it is unaffected by the demand conditions of an industry
B
due to advances in medicine, Americans are currently living longer than in the past. As a result, the sale of products that meet the needs of older individuals such as devices for assist in walking and movement have increased. In the context of an industry's macro environment, age is considered a: a. technological force b. demographic force c. social force d. political force e. legal force
B
ntel's invention of the microprocessor in the early 1970s, Cisco's development of the router for routing data over the Internet in the mid-1980s, and Apple's development of the iPod, iPhone, and iPad in the 2000s can be referred to as _____ innovations. a. process b. product c. customer d. sector e. absorptive
B
A company's competitive advantage is more durable when: a. barriers to imitation are low and there are few capable competitors. b. barriers to imitation are high and there are many capable competitors. c. barriers to imitation are high and the industry is stable. d. the industry is stable and there are many capable competitors. e. the industry is stable and barriers to imitation are low.
C
An important first step in the process of formulating a company's mission is to answer the question: a. What is our budget for advertising? b. What are the government regulations that are most likely to impact our business? c. What is our business? d. How do we persuade shareholders to provide risk capital? e. How many employees should we hire?
C
Between 2005 and 2011, Blue Drinks, a multinational beverage corporation, increased its return on investment from $5 million to $25 million. The company was able to do this by expanding its product line to include a wider variety of flavors. The $20 million increase in its return on investment between 2005 and 2011 can be referred to as which of the following? a. Shareholder value b. Dividend payment c. Profit growth d. Profitability turnover e. Risk capital
C
Capabilities refer to a company's: a. manufacturing equipment. b. reputation. c. skills at using resources effectively. d. competitors who are capable of offering greater variety of products. e. patents, copyrights, and trademarks.
C
Competitive advantage typically leads to: a. a defective business model. b. average profitability within an industry. c. superior profitability. d. the Icarus paradox. e. barriers to changes in the organization.
C
Daryl works for Delta Corp. He is involved in all the important decision-making processes of the company and is also responsible for the overall performance of the company. In the context of strategic management, Daryl is most likely to be a: a. line manager b. functional manager c. general manager d. production supervisor e. project manager
C
Due to a recent relaxation in pollution standards, ford motors is withdrawing its electric-powered cars from sales in the US market. ford is responding to a change in which of the following macro environmental forces? a. macroeconomic b. demographic c. political and legal d. social e. global
C
Economies of scale can arise from: a. cost reduction gained through decreased production b. high prices on bulk purchases of raw material inputs and component parts c. an advantage gained by spreading fixed production costs over a large production volume d. increased spending on marketing and advertising activities e. poor production operations
C
In growth industries: a. the intensity of rivalry is very high b. technological expertise is the most important entry barrier c. threat from potential competitors is typically highest d. distribution channels are poorly developed e. buyers are not familiar with the industry's products
C
In spite of definite customer demand, new products often fail due to: a. faster cycle time. b. low customer defection rate. c. poor commercialization. d. increased response time. e. scramble to gain first-mover advantage.
C
In the context of strategic management of a company, _______ have profit-and-loss responsibility for a product, a business, or the company as a whole. a. line managers b. functional managers c. general managers d. government regulators e. marketing managers
C
In the late 1800s, when the automobile was first manufactured, the automobile industry would have been considered a(n): a. mature industry b. stakeout industry c. embryonic industry d. growth industry e. declining industry
C
In the typical scenario planning exercise: a. managers entirely depend on employee feedback. b. managers try to come up with alternative plans when a business model has failed. c. managers formulate plans upon 'what-if situations about the future. d. managers do a 'postmortem' to understand what went wrong with a strategy. e. the corporate-level management sets targets for functional-level managers
C
Industry dynamism refers to: a. the gradual erosion of a company's customer base over time. b. shifts in product profitability. c. a rapidly changing industry envirornnent. d. increasing per-unit costs. e. a company's difficulty in changing its strategies and structure.
C
Jeffrey Ffeffer believes that a manager's power comes from his or her: a. ability to prioritize the well-being of the company over personal well-being. b. ability to be unemphatic toward the feelings and emotions of the subordinates. c. control over the important organizational resources. d. ability to cut overhead costs. e. personal rapport with the senior management.
C
Kim's Apparel was a very popular clothing store. It made huge profits during the first two years of its establishment. However, the company failed to keep up with the changing needs of the customers and eventually had to be closed down. Which of the following concepts does the scenario illustrate? a. Cycle time b. Customer defection c. Icarus paradox d. Distinctive competency e. Diseconomies of scale
C
Members of a strategic group: a. compete only with members of other strategic groups b. are affected by Porter's five competitive forces in the same way and to the same degree as the members of other strategic groups c. follow a business model that is similar to that pursued by other companies in the group d. face no threat of product substitutes from other members e. move easily between groups without barriers
C
More people seem to fear a snake bite than a dog bite, and yet statistically one is more likely to be bitten by a dog than by a snake. This is because people tend to estimate the probability of an outcome based on how easy the outcome is to imagine. This represents which of the following cognitive biases? a. Escalating commitment b. Hypothesis bias c. Availability error d. Representativeness e. Illusion of control
C
One of the primary roles of research and development in achieving superior efficiency is: a. facilitating cooperation among functions. b. limiting customer defection rates by building brand loyalty. c. designing products for ease of manufacture. d. instituting training programs to build skills. e. implementing pay for performance.
C
Pay for performance tends to: a. increase per-unit costs. b. decrease employee productivity. c. increase employee output. d. have little effect on employee output. e. impede teamwork.
C
Ralph is a well-liked manager at Aries Inc. He eloquently communicates the goals of the organization and has even been successful in making the organization's vision part of its culture. Which of the following characteristics of good strategic leaders can be observed in Ralph? a. Authoritarian leadership b. Devil's advocacy c. Eloquence d. Inconsistency e. Empathy
C
Research suggests that the adoption of ________ may increase efficiency and lower unit costs relative to what can be achieved by the mass production of a standardized output. a. just-in-time manufacturing b. quick technology c. flexible production technology d. stable production e. unscheduled manufacturing
C
Systematic errors in the decision-making process are caused by: a. inadequate information. b. information overload. c. cognitive biases of decision makers. d. poor data collection procedures. e. the devil's advocacy method.
C
The Icarus paradox suggests that: a. companies should stick to a narrowly defined line of products. b. better-than-average profitability is an elusive goal. c. companies may become myopic and lose sight of market realities. d. companies often pursue too many strategies at once. e. companies should change strategies before strategies need changing.
C
The experience curve concept: a. helps a company realize both learning effects and diseconomies of scale. b. suggests that unit manufacturing costs increase by a certain amount each time output is increased. c. is very important in industries that mass-produce a standardized output. d. suggests that achieving low costs allows a firm to charge a premium price. e. is least likely to bottom out as long as the company does not stop production.
C
The experience curve refers to the: a. learning by doing technique. b. company's overall experience in a particular industry. c. systematic lowering of the cost structure and unit cost reductions. d. diseconomies of scale caused by inexperienced workers. e. increases in unit costs experienced over time.
C
The term value chain refers to the idea that a company is: a. one of a series of units that comprise an industry segment. b. the producer of a series of customer-valued products that are linked together. c. a series of activities that transform inputs into products that customers value. d. one of a series of economic functions. e. a collection of various products and their attributes.
C
Using the value chain model, which of the following primary activities is performed last, as inputs are transformed into outputs? a. Research and development b. Marketing and sales c. Service and support d. Production e. Human resources
C
Which of the following best describes product innovation? a. Transforming a quantity of inputs into a given output b. Identifying and satisfying a customer's needs c. Creating products that have superior attributes than existing products. d. Developing a new process that focuses on quantity rather than quality. e. Measuring the quantity of outputs produced per employee
C
Which of the following is NOT one of the factors in the economic forces of the macro environment? a. interest rates b. inflation c. cultural changes d. currency exchange rates e. economic growth rate
C
Which of the following is not a benefit of tight cross-functional integration among research and development (R&D), production, and marketing? a. New products are designed for ease of manufacture. b. Development costs are kept in check. c. Product development projects are driven by company innovations. d. Time to market is minimized. e. Customer needs are considered in the product development process.
C
Which of the following is not a characteristic of emotional intelligence? a. Self-awareness b. Self-regulation c. Escalating commitment d. Empathy e. Social skills
C
Which of the following is not a cognitive bias? a. Escalating commitment b. Reasoning by analogy c. Ivory tower thinking d. Representativeness e. Illusion of control
C
Which of the following is the final result of the five-step chain reaction on which the philosophy of the TQM is based? a. Better use of time and materials b. Increase in profitability c. Creation of more jobs d. Higher market share e. improvement in productivity
C
Which of the following statements is true about government regulations in the context of entry barrier of an industry? a. government deregulation in an industry results in significant reduction in competition b. government regulation has not constituted a major entry barrier for many industries c. falling entry barriers due to government deregulation results in higher competition and lower industry profit rates d. the threat of new entrants reduces when the government deregulates an industry e. companies that enjoy brand loyalty and have significant scale economies are the ones who face major threat of competition due to government deregulation
C
Which of the following statements is true about strategic leadership? a. It is the primary responsibility of the functional managers of an organization. b. It does not take into account the task of maximizing shareholder value. c. It is involved with taking decisions regarding how to create a competitive advantage. d. It is a concept that does not apply to multidivisional companies that have several business units. e. It is essentially about supervising workers at a manufacturing unit of an organization.
C
Which of the following statements is true about the complementors? a. their impact on industries was first recognized by Porter's five forces model b. they have little importance in high-technology industries c. they have the power to impact the sales of the industry to which they supply complement products d. they tend to increase the sales of the industry they are supplying complements to by producing fewer lower-quality complement products e. they cannot gain enough power to extract profits from the industry to which they supply complement products
C
________ refers to unit cost increases associated with a large scale of output. a. Economies of scale b. Learning effects c. Diseconomies of scale d. Flexible manufacturing e. Mass customization
C
just-in-time inventory systems: a. are used only by manufacturing firms. b. provide a buffer stock of inventory for a company. c. are used to reduce inventory holding costs. d. save costs by outsourcing inventory management to other companies. e. always keep extra inventory on hand for emergencies.
C
A baking company has different product ranges like whole-wheat pizzas for the diet-conscious and rich cookies for children and youngsters. The company is catering to different groups of customers known as: a. Investors b. entrants c. sectors d. market segments e. substitutes
D
A company's mission: a. describes the marketing strategies the company intends to use to sell its products. b. outlines the manner in which employees and managers should conduct themselves. c. defines the manner in which strategies will be developed and attained. d. describes what the company does. e. describes the benefits offered to the shareholders.
D
A company, at its inception, states that its goal is "to provide the best customer service possible." Which of the following best describes this objective? a. The company's emergent strategy b. The company's corporate structure c. The company's HR strategy d. The company's mission statement e. The company's damage control plan
D
As an industry enters the shakeout stage: a. rivalry among companies declines b. demand grows at a high rate c. prices of products increase d. excess productive capacity emerges e. new entrants come into the market
D
Benchmarking can be defmed as the practice of: a. monitoring activities related to the design, creation, and delivery of a product, its marketing, and its support and after-sales service. b. developing products that are new to the world or have superior attributes to existing products in the market. c. measuring the time that it takes for a good to be delivered or a service to be performed. d. measuring a company against the products, practices, and services of some of its most efficient global competitors. e. analyzing the financial position of a company and creating the income statements and the balance sheets.
D
Brand loyalty can be created by: a. minimal advertising b. not using patents to protect products c. cutting the costs for research and development d. emphasizing high product quality e. minimizing after-sales service
D
Cream Cups bakes cakes in several varieties dedicated to special occasions. It also allows its customers to personalize the cakes according to their personal preferences. This is an example of: a. learning effects. b. just-in-time inventory. c. customer defection. d. mass customization. e. diseconomies of scale.
D
Devil's advocacy: a. involves generating a plan and a counter-plan that reflects plausible conflicting courses of action. b. is an example of ivory tower planning. c. hides the possible perils of a recommended course of action. d. involves generating a plan, and a critical analysis of that plan. e. involves downplaying the problems that could result from implementing a particular plan.
D
Ford Motors developed the Explorer sports utility vehicle, the number I selling sports utility vehicle in the United States, based on an extensive study of customer preferences. Which value chain activity of Ford conducted those studies? a. Research and development b. Human resources c. Materials management d. Marketing and sales e. Company infrastructure
D
Holly owns a landscape company and is thinking about expanding her services to include outdoor water features (waterfalls, streams, ponds). If, before making this decision, she looks at the experience of similar fmns that have added outdoor water features, she is employing: a. cognitive bias. b. illusion of control. c. devil's advocacy. d. outside view. e. dialectic inquiry.
D
If economies of scale are an industry's primary entry barrier, a new entrant's major concern is: a. its inability to counter brand loyalty that customers have for established companies in the industry b. the inferior quality of its products c. its inability to match the innovation of the established firm d. its inability to produce insufficient volume to match the cost advantages of established producers e. its inability to get buyers to switch to its product
D
Julian was asked to examine the demographic forces facing his employer, a clothing manufacturer. Which of the following factors is Julian most likely to examine? a. government regulations b. inflation c. manufacturing technology d. age of the population e. society's growing interest in exercise
D
Learning effects: a. result in unit manufacturing costs increasing by a certain amount each time output is increased. b. suggest that production costs increase because of increasing labor productivity. c. are more significant when simple steps in an assembly process are performed over and over again. d. are more significant when a technologically complex task is repeated. e. lead to diseconomies of scale.
D
When shopping for clothing such as shirts and jeans, Tyrone only buys products from Eastern Clothing Company even if there are several other companies that offer similar products at lower prices. Tyrone's preference for Eastern Clothing Company demonstrates: a. lack of demand b. bargaining power c. risk of entry d. brand loyalty e. lack of economies of scale
D
Which of the following cognitive biases occurs when decision makers allocate even more resources to a project if they receive feedback that the project is failing? a. Prior hypothesis bias b. Reasoning by analogy c. Illusion of control d. Escalating commitment e. Representativeness
D
Which of the following determines the cost of goods sold? a. The balance sheet b. The fmancial position statement c. The cash budget d. The income statement e. The overhead expense statement
D
Which of the following is NOT a barrier to entry? a. economies of scale b. brand loyalty c. absolute cost advantages d. high customer bargaining power e. high customer switching costs
D
Which of the following is a tactical step for getting down the experience curve ahead of competitors? a. Premium pricing to create an image of uniqueness in consumers' minds b. Pursuing a distinctive competence in focused marketing c. Constructing a manufacturing plant of less than minimum efficient scale d. Using aggressive pricing and promotions to expand sales volume as rapidly as possible e. Making the assembly of the product as complex as possible because this results in greater learning effects
D
Which of the following is currently an embryonic industry? a. personal computers b. biotechnology c. internet retailing d. nanotechnology e. wireless communication
D
Which of the following is not a product attribute? a. Form b. Features c. Style d. Price e. Reliability
D
Which of the following is the first step in the five-step chain reaction, as articulated by Deming, with regard to the philosophy underlying TQM? a. improvement in productivity b. Increase in a company's profitability c. Higher market share due to superior quality of products d. Reduction of costs due to improved quality e. Creation of more jobs
D
Which of the following is the organization's principal general manager? a. Line manager b. Marketing division head c. CFO d. CEO e. Sales manager
D
Which of the following statements is true about competitive advantage? a. It is unaffected by the strategies taken by the company. b. It is considered to be sustained when it lasts for three months. c. It exists only when the company's profitability is greater than the ten highest grossing fmns in the world. d. It exists only when the company's profitability is greater than the average profitability and profit growth of its rivals. e. It is seldom affected by the business model of the company.
D
Which of the following support activities in the value chain refers to the transmission of physical materials from procurement through production and into distribution? a. Human resources b. Information systems c. Research and Development d. Logistics e. Operations
D
Which of the following trends has led to the fragmentation of many consumer markets? a. Self-managing teams b. Project management c. TQM d. Customization e. Increased response time
D
With regard to customer defection, which of the following statements is incorrect? a. Defection rates are determined by customer loyalty. b. The longer a company holds on to a customer, the greater is the volume of customer-generated unit sales. c. Lowering customer defection rates allows a company to achieve a lower cost structure. d. The longer a company retains a customer the higher the average unit cost of each sale. e. There is a positive relationship between the length of time that a customer stays with the company and profit per customer.
D
Within a diversified company, the responsibilities of corporate-level strategic managers include: a. supervising production at the manufacturing units of the company. b. compiling sales reports, company costs, employee productivity and calculating the employee turnover rate. c. responding to employee complaints on a daily basis. d. providing leadership for the entire organization and allocating resources among its different business areas. e. maintaining records of transactions with suppliers.
D
_______ refers to the investment that shareholders make in a company that cannot be recovered if the company fails and goes bankrupt. a. Profitability b. Shareholder value c. Debt d. Risk capital e. Dividend payments
D
According to Ghernawat, a strategic commitment is: a. the factor that make it difficult for a competitor to copy a company's distinctive competencies. b. the time that it takes for a good to be delivered or a service to be performed.. c. the set of activities related to the design, creation, and delivery of the product, its marketing, and its support and after-sales service. d. the collection nonphysical entities such as brand names, company reputation, experiential knowledge, and intellectual property, including patents, copyrights, and trademarks.. e. a company's dedication to developing a particular set of resources and capabilities.
E
As a barrier to new entry, absolute cost advantages can be based on: a. continuous advertising of brand and company names, and product innovation achieved through research and development b. high product quality, service-oriented innovations, and good after-sales service c. cost reductions that arise from the mass production of standardized output d. the unique ability of established companies to spread fixed costs over a large volume e. superior production operations and processes due to accumulated experience, patents, or trade secrets
E
Cool Looks, Inc. is a local fashion design company that actively solicits comments from its customers about the quality of its clothing and the kind of merchandise they want it to supply. Which of the following mechanisms for focusing on the customer is Cool Looks utilizing? a. Managing materials b. Improving response time c. Demonstrating leadership d. Shaping employee attitudes e. Knowing customer needs
E
Cost accountants are responsible for gathering and monitoring data used for controlling the organization's costs. In which value chain activity do cost accountants work? a. Research and development b. Human resources c. Materials management d. Marketing and sales e. Company infrastructure
E
Customer response time is: a. the time taken for value to be placed on a company's products by customers. b. the time taken for development of a new process for producing products and delivering them to customers. c. the time taken for given inputs to be converted into an output. d. the time taken for development of products that have superior attributes to existing products. e. the time taken for a good to be delivered or a service to be performed.
E
Economies of scale are: a. unit cost increases associated with learning effects. b. unit cost reductions due to inferior quality of products. c. realized when output is reduced to a minimum. d. realized when the selling price is equal to the cost price of the products. e. unit cost reductions associated with a large-scale output.
E
Entry barriers in embryonic industries tend to be based on: a. brand loyalty b. economies of scale c. absolute cost advantages d. regulatory advantage e. technological knowhow
E
Karen, a manager at Libra Inc, had noticed that her subordinates were experiencing a lot of stress. After conducting a meeting with her subordinates, Karen realized that they were extremely overworked and daunted by close deadlines. Determined to reduce their stress, she introduced a new process that eliminated time-consuming activities and gave them more flexibility with regard to work timings. The action taken by Karen demonstrates which of the following aspects of emotional intelligence? a. Availability error b. Self-awareness c. Self-regulation d. Motivation e. Empathy
E
Many beverage manufacturers are noticing that the sales for packaged water and fruit-based beverages is increasing compared to carbonated drinks as customers are increasingly becoming health conscious. This change in customer preferences can be attributed to which of the following factors of the macroenvironment? a. economic forces b. demographic forces c. technological forces d. political forces e. social forces
E
Mass customization: a. limits a company's ability to customize products. b. reduces the use of individual machines and hinders quality control at all stages of the manufacturing process. c. increases the setup times for complex equipment. d. is the use of technology to produce large quantities of a standardized output. e. is a company's ability to reconcile low cost and differentiation that were once thought incompatible.
E
One of the basic building blocks of competitive advantage is: a. quantity. b. logistics. c. variety. d. distribution. e. innovation.
E
Strategy formulation refers to the: a. task of executing corporate- and business-level plans. b. process by which strategies are put into action. c. task of designing organizational structures and control systems. d. task of implementing emergent strategies. e. task of analyzing an organization's external and internal environment and then selecting an appropriate strategy.
E
The bargaining power of an industry's suppliers is greater when: a. the supply industry is fragmented b. switching costs are minimal for companies because of little difference among products offered by different suppliers c. the industry buys in large quantities d. the product that suppliers sell has many substitutes and is not vital to the companies e. the industry is not an important customer to the suppliers
E
The intellectual property of an organization is a(n): a. tangible resource. b. strategic commitment. c. tangible capability. d. barrier to change. e. intangible resource.
E
The marketing strategy that a company adopts: a. has little impact on the company's efficiency and cost structure. b. aims at attaining superior efficiency of the company's operations. c. should not take into account the impact the strategy has on the company's cost structure. d. aims at automating much of the work in the production process. e. refers to the position that the company takes with regard to a product's pricing and distribution.
E
The simplest measure of efficiency is: a. the amount of money the company has to work with in the short term. b. the ratio of revenues divided by invested capital. c. the net profit expressed as a percentage of sales. d. the total costs of producing products. e. the quantity of inputs that it takes to produce a given output
E
Which of the following is NOT a determinant of the extent of rivalry among established companies? a. industry competitive structure b. demand conditions c. the cost structure of firms in an industry d. exit barriers e. the power of buyers
E
Which of the following is NOT a role played by infrastructure leadership in implementing reliability improvement methodologies? a. Providing leadership and commitment quality b. Finding ways to manage quality c. Setting goals and creating incentives d. Soliciting input from employees e. Lengthening production mns
E
Which of the following is an important attribute for a product from a quality-as-reliability perspective? a. Styling b. Aesthetic appeal c. Level of after-sale service d. Features e. Performance
E
Which of the following is not a way that companies can avoid failure? a. Benchmarking b. Continuous learning c. Developing distinctive competencies d. Exploiting luck e. Following rigid business processes
E
Which of the following is not one of the principles commonly found in companies that have successfully embraced the TQM philosophy? a. Building an organizational commitment to quality b. Finding ways to measure quality c. Giving more time for supervisors to work with employees d. Training new employees e. Defining work standards only in terms of numbers or quotas
E
Which of the following is not true regarding a company's distinctive competencies? a. They represent the unique strengths of the company. b. They refer to company strengths that competitors cannot easily match or imitate. c. They form the bedrock of a company's strategy. d. They can be based in any of the value creation functions of the company. e. They are shared by many firms in an industry.
E
Which of the following statements about customer focus is false? a. It must start at the top of the organization. b. It is a central part of TQM. c. It can be facilitated by soliciting feedback from the customer. d. It requires that all employees see the customer as the focus of their activity. e. It can be achieved solely by demonstrating leadership .
E
Which of the following statements is true about SWOT analysis? a. It does not encompass the analysis of an organization's external environment. b. It essentially results in the generation of one single strategy that deals with one particular internal function of an organization. c. It does not encompass functional-level strategies directed at improving the effectiveness of operations within a company. d. It essentially produces strategies that are incongruent with each other. e. It is a methodology for choosing between competing business models.
E
_________ arises when a customer invests times, energy, and money shifting from the products offered by one established company to the products offered by a new entrant a. overhead costs b. incremental costs c. marginal costs d. opportunity costs e. switching costs
E
T/F: A group of firms all make tools for baking-pots, pans, measuring cups, and utensils. This group should be referred to as a market segment
False
T/F: Although important, unfortunately, innovation plays a minor role in achieving competitive advantage.
False
T/F: Changes in the characteristics of a population, such as age or race, are irrelevant to the analysis of an industry's macro-environment
False
T/F: Customer focus in a function of only the lower levels of an organization.
False
T/F: Emergent strategies arise from within the company as a result of prior planning.
False
T/F: Functional strategies play only a small role in organizational success because they occur at a low level in the finn.
False
T/F: Internal analysis is concerned with identifying a company's opportunities and threats.
False
T/F: Learning effects tend to be more significant when a technologically complex task is performed only occasionally.
False
T/F: Lucy is an entrepreneur who is interested in opening her own bakery. She is concerned with obtaining money for equipment for the bakery such as ovens, pots and pans, and display cabinets. Lucy is trying to obtain intangible resources for her business.
False
T/F: One of the factors that distinguishes organizations in the nonprofit sector from profit-making businesses is the lack of a need for strategic management.
False
T/F: Patents typically provide the greatest barrier to imitation.
False
T/F: Production and materials-management functions need not be changed in response to unanticipated customer demands as they do not affect response time.
False
T/F: Research finds that leaders who exhibit a high degree of emotional intelligence tend to be significantly less effective than those who do not.
False
T/F: Rules of thumb, or heuristics, always help to avoid severe and systematic errors in the decision-making process.
False
T/F: Sherree works at Dustcloud Manufacturing where she is part of a seven member team. Her team coordinates its own activities as well as makes its own hiring, training, work, and reward decisions. This type of team is referred to as a virtual team.
False
T/F: Six Sigma encompasses the activities necessary to get inputs and components to a production facility, through the production process, and out through a distribution system to the end user.
False
T/F: Starbucks and an independent local cafe are different in terms of their business techniques. They both sell coffee, and therefore belong to the same strategic group
False
T/F: Strong brand loyalty and high customer switching costs are low barrier to entering an industry
False
T/F: Substitute products are not a threat if a company is the market leader
False
T/F: Successful innovation cannot transform the nature of industry competition
False
T/F: Suppliers are most powerful when the products that they sell have many substitutes
False
T/F: Tangible resources include experiential knowledge and technological know-how
False
T/F: The Icarus paradox suggests that those factors that led to a company's success will continue in the future because the competitors cannot imitate them.
False
T/F: The ability of established competitors to imitate the competitive advantage of a rival is not limited by factors such as existing strategic commitments and low absorptive capacity.
False
T/F: The bottled water industry created new competitors for Coca-cola, but did not change the basic industry boundaries
False
T/F: The building blocks of competitive advantage are turnover, quantity, and profitability.
False
T/F: The challenge for a company's human resource function is to find ways to lower wage and benefits costs.
False
T/F: The concept of economies of scale suggests that unit costs continue to fall indefinitely as output volume increases.
False
T/F: The concepts vision and mission can be used interchangeably.
False
T/F: There is a negative relationship between the length of time that a customer stays with a company and profit per
False
T/F: To determine its opportunities and threats, a firm should focus on internal processes and capabilities.
False
T/F: To increase shareholder value, managers must try to venture into new markets whether the results are profitable or not.
False
T/F: Unfortunately, quality-as-excellence and quality-as-reliability are concepts that apply to goods but not services.
False
T/F: When a company has differentiated products, they have less pricing options.
False
T/F: When buyers are in a weak bargaining position, companies in the industry must lower their prices to increase profits
False
T/F: While Information Systems have greatly improved productivity, they have had little impact on lowering costs.
False
T/F: A business model is managers' conception of how the set of strategies their company pursues should mesh together into a congruent whole, thus enabling the company to gain a competitive advantage and achieve superior profitability and profit growth
True
T/F: A company's closet competitors are those in its strategic group, not those in other strategic groups in the industry
True
T/F: A company's profitability depends on the value customers place on the company's products
True
T/F: A firm obtains competitive advantage when its strategy results in superior performance compared to its competitors.
True
T/F: A strategy can be defined as a set of related actions that managers take to increase their company's performance
True
T/F: A technological change, such as the rise of the internet, can represent either an opportunity or a threat
True
T/F: A value chain is a sequence of activities for transforming inputs into outputs that are valued by customers.
True
T/F: A vital source of information about the causes of poor quality are the firm's own employees.
True
T/F: Absorptive capacity refers to the ability of an enterprise to identify, value, assimilate, and use new knowledge.
True
T/F: All else being equal, if a company moves down the experience curve faster than its rivals, it should realize a lower cost structure.
True
T/F: At Adam's bicycle repair shop, the primary value chain activity of production occurs each time a customer's bicycle is repaired.
True
T/F: At the heart of any company's business model is the combination of congruent strategies aimed at creating distinctive competencies that differentiate its products and result in a lower cost structure.
True
T/F: Benchmarking is a practice in which a company's performance is compared against that of competitors and the historic performance of the company itself.
True
T/F: Close integration between research and development (R&D), production and marketing can help a company avoid innovation failures.
True
T/F: Cost reductions gained through mass-producing a standardized output is a source of scale economies
True
T/F: Deregulation of the mortgage industry is an example of how political and legal forces can impact an industry
True
T/F: Diseconomies of scale are the unit cost increases associated with a large scale of output.
True
T/F: Distinctive competencies are finn-specific strengths that allow a company to differentiate its products and achieve substantially lower costs than its rivals.
True
T/F: Distinctive competencies shape the functional-level strategies that a company can pursue.
True
T/F: Emergent strategies are the unplanned responses to unforeseen circumstances.
True
T/F: Employee productivity is a common measure of efficiency.
True
T/F: Flexible production technologies allow a company to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output
True
T/F: General managers bear responsibility for the overall performance of the company or for one of its major self contained subunits or divisions.
True
T/F: Government deregulation of telephone service lowered the barriers to entry and lowered industry profit rates
True
T/F: Growing demand tends to reduce rivalry because all companies can sell more without taking market share away from other companies
True
T/F: High-technology industries are dependent on complementary products for their mutual success
True
T/F: IBMs investment in mainframe computers, that proved disadvantageous when the market shifted to smaller personal computers, is an example of a prior strategic commitment.
True
T/F: If a company's profitability is higher than the industry average, it has a competitive advantage.
True
T/F: Imitating a company's capabilities tends to be more difficult than imitating its tangible and intangible resources.
True
T/F: In Porter's framework, the stronger the five forces, the ability of established companies to raise prices and earn greater profits becomes more limited
True
T/F: In Porter's framework, the stronger the five forces, the ability of established companies to raise prices and earn greater profits becomes more limited.
True
T/F: In practice, the strategies of most organizations are probably a combination of the intended and emergent strategies.
True
T/F: In the fashion industry, the time required to take a new product from design inception to placement in a retail store is known as customer response time.
True
T/F: Interest rates have an impact on the sale of autos, appliances, and capital equipment, and thus represent a macroeconomic force
True
T/F: Market segments are distinct groups of customers within a market that can be differentiated from each other on the basis of their individual attributes and specific demands
True
T/F: Mass customization describes the ability of companies to use flexible manufacturing technology to reconcile the two goals of low cost and differentiation through product customization.
True
T/F: Mintzberg maintains that emergent strategies are often successful and may be more appropriate than intended strategies.
True
T/F: Nene works in a factory where she picks crab meat from crabs. She is paid per day based upon the number of pounds of crab meat that she picks. Nene's daily number of pounds of crab meat can be referred to as her productivity.
True
T/F: No matter how complex the task is, learning effects typically die out after a limited period of time.
True
T/F: One of defining characteristics of the mature stage of the industry life cycle is that growth is low or zero
True
T/F: Opportunities arise when a company can take advantage of conditions in its environment to formulate and implement strategies that allow it to become more profitable.
True
T/F: Poor commercialization occurs when there is definite customer demand for a new product, but the product is not well adapted to customer needs because of factors such as poor design and poor quality.
True
T/F: Poor positioning strategy arises when a company introduces a potentially attractive new product but sales fail to materialize because it is poorly positioned in the marketplace.
True
T/F: Product attributes that collectively define product excellence include the form, features, performance, durability, and styling of the product.
True
T/F: ROIC is a measure of how efficiently and effectively managers use the capital at their disposal to produce profitability.
True
T/F: Rapid growth in demand enables companies to expand their revenues and profits without taking market share away from competitors
True
T/F: SWOT analysis is implemented to fine-tune strategies.
True
T/F: Six Sigma is a quality and efficiency program derived from the concept of Total Quality Management, and was widely used in Japan before acceptance in the U.S.
True
T/F: Strategic leadership is concerned with how to most effectively manage a company's strategy-making process to create competitive advantage.
True
T/F: Strong brand loyalty leads to more sales and the ability to charge higher prices.
True
T/F: Texas Instruments achieved early success through engineering excellence. But thereafter, they became so obsessed with engineering that they lost sight of market realities. This is an example of the Icarus Paradox.
True
T/F: The "sigma" in the Six Sigma name refers to the Greek letter meaning standard deviation from the mean.
True
T/F: The CEO is a company's principal general manager.
True
T/F: The comparison of strengths, weaknesses, opportunities, and threats is normally referred to as a SWOT analysis.
True
T/F: The feedback loop in the model of the strategic management process indicates that the process is ongoing; it never ends
True
T/F: The great virtue of scenario planning is that managers must think outside the box to anticipate what they might do in different situations.
True
T/F: The greater the exit barriers, the harder it is for companies to reduce capacity, and the greater the threat of severe price competition
True
T/F: The importance of reliability in building competitive advantage has increased dramatically over the past decade.
True
T/F: The more a resource is fmu-specific and difficult to imitate, the more likely a company holding that resource is said to have a distinctive competency.
True
T/F: The more utility a company creates for its customers, the more flexibility it has in determining prices.
True
T/F: The most successful fmns are those that constantly learn and upgrade their distinctive competencies
True
T/F: The planning model suggests that a company's strategies are the result of a plan from a highly structured process orchestrated by top management.
True
T/F: The primary activities of the value chain include the design, creation, and delivery of the product, the product's marketing, and its support and after-sales service.
True
T/F: The profit growth of a company can be measured by the increase in net profit over time.
True
T/F: The risk of entry by potential competitors is a function of the height of the barriers to entry
True
T/F: The values of a company state how managers and employees should conduct themselves.
True
T/F: Threats arise when conditions in the external environment endanger the integrity and profitability of the company's business.
True
T/F: Through efficient logistics at Grasshopper Grocers, the stock in the stores is automatically replenished once every week. Management at Grasshopper Grocers uses a just-in-time inventory system.
True
T/F: Together with an analysis of the company's external environment, internal analysis gives managers the information they need to choose the business model and strategies that will enable their company to attain a sustained competitive advantage.
True
T/F: Well-constructed goals provide a means by which the performance of managers can be evaluated.
True
T/F: When Amber first started working at a car manufacturing plant assembling car doors, she was slower at the task than her co-workers. As time passed, her speed at assembling the doors increased and she even taught others how to perform the task more quickly. As a result of increased employee productivity, this particular plant experienced cost savings. These cost savings can be attributed to learning effects.
True
T/F: When the value of the dollar is low compared to the value of other currencies, products made in the United States are relatively inexpensive and products made overseas are relatively expensive
True