MGMT 498

Fragmentation

This fragmentation generally happens when there are external shocks to an industry such as deregulation, new legislation, technological innovation, or globalization.

A firm incurs $100 to manufacture an office table. It fixes the market price of the table as $250 and discounts the price to $200. However, the maximum a person is willing to pay for it is $180. What is the amount of total perceived consumer benefits in this scenario?

180

difference between monopolistic competition and an oligopoly

A monopolistically competitive industry has many firms competing against each other, and an oligopolistic industry is consolidated with a few large firms.

when is competitively rivalry strongest

Competitive rivalry is strongest between firms that are within the same strategic group. The closer firms are on the strategic group map, the more directly and intensely they are in competition with one another.

Great Sound Inc. is a publicly traded company that specializes in manufacturing consumer electronics. Which of the following best exemplifies the implementation of a shared value creation framework at Great Sound Inc.? Great Sound's employees work in shifts to adhere to the eight-hour workday rule. Great Sound's products are developed in a high-tech R&D facility based in Florida. Great Sound uses recycled materials to create its commercially successful products. Great Sound has a customer reward program for its most loyal customers.

Great Sound uses recycled materials to create its commercially successful products.

MoreCash Inc. is a major financial services corporation. With the CEO of MoreCash Inc. preparing to retire, several top managers are vying for the position. Jared considers himself to be a leading candidate. He not only has advanced degrees from business schools and more than a decade of experience working for MoreCash Inc., but he also has personally ensured that his division has exceeded its performance benchmarks over the past three years, even though many of his employees are dissatisfied because they feel they are stagnating in their jobs. According to the Level-5 leadership pyramid, why has Jared failed to exhibit the qualities of a Level-5 leader?

He is not able to help others reach their full potential.

Sugar & Sweet Sodas has seen its market share erode in recent years, as consumers increasingly turn toward healthier beverage choices such as unsweetened sparkling water. Hoping to rekindle interest in sugary sodas, Sugar & Sweet decides to produce a limited run of "throwback" cans using labeling first introduced in the 1980s. What is wrong with this strategy? It fails to face the competitive challenge. It does not involve concrete actions. It lacks strategic commitments. It tries to be everything to everybody.

It fails to face the competitive challenge.

What do strategy scholars believe is the result of executives' pursuit of strategies that define value creation too narrowly in public stock companies?

It reduces the trust of shareholders in the organization as a vehicle for value creation and societal welfare.

Which of the following statements is true about strategic groups? It is not possible to have two different strategic groups within the same industry. Rivalry within the same strategic group tends to be lower than rivalry between different strategic groups. Profitability varies between different strategic groups. Companies within the same strategic group are complementors to each other.

Profitability varies between different strategic groups.

Meiko has been tasked with formulating the business strategy for LaFrance Beauty's new line of skin rejuvenating cream. Which of the following ideas would Meiko be likely to include in her proposal? Open kiosks in shopping centers located in developing countries with rising disposable incomes. Promote the cream as the only one on the market with a new miracle enzyme. Invest in increasing social media posts about LaFrance products. Reorganize the manufacturing division to gain efficiency.

Promote the cream as the only one on the market with a new miracle enzyme

Strategic Leadership

Strategic leadership pertains to executives' use of power and influence to direct the activities of others when pursuing an organization's goals.

Keeping in mind the five forces in the airline industry, which of the following best explains the difficulty airlines have in generating a profit? Substitutes are readily available in the form of trains, buses, and cars, thus reducing the profit potential in the industry. Suppliers have weak bargaining power because they offer products that are not differentiated. Entry barriers in the industry are high, resulting in hardly any new airlines popping up. Consumers in the industry make decisions based on price, thus reducing the intensity of rivalry in the industry.

Substitutes are readily available in the form of trains, buses, and cars, thus reducing the profit potential in the industry.

The diagonal assembly system was a production system pioneered by the automobile company Gogo. Recently, Gogo was able to sue a competitor and won the suit, receiving $100 million in damages. Which of the following would most likely enable Gogo to win such a lawsuit? The competitor ran advertising that criticized Gogo's assembly system. The competitor failed to apply for a patent of its own assembly system. The competitor infringed on Gogo's patent of the diagonal assembly system. The competitor developed an assembly system that worked on a newer theory than Gogo's system.

The competitor infringed on Gogo's patent of the diagonal assembly system.

Which one of the following statements below can best be linked to the Nobel laureate Milton Friedman? Corporate social responsibility is absolutely vital to a firm's long-term success. The social responsibility of a business is to increase its profits. Corporate social responsibility is a universally accepted and practiced principle. Corporate social responsibility should be incorporate in MNEs.

The social responsibility of a business is to increase its profits.

Which of the following answers is one of the three dimensions that make up the triple-bottom-line framework?

The three dimensions of the triple bottom line are profits, people, and planet.

Which of the following strategies represents a CSR perspective?Northern Lights Industries uses only locally sourced, recycled materials to manufacture its products. Dream Co. financed a water-purification plant that helped its suppliers increase output for a lower cost while providing clean water to a rural community. Westminster Law Associates donates professional services to an organization providing legal aid to recent immigrants. Crane's considers its technical support of organic soybean farmers in its supply chain to be an investment rather an expense.

Westminster Law Associates donates professional services to an organization providing legal aid to recent immigrants.

monopolistic competition

a market structure in which many companies sell products that are similar but not identical

Managing a supply chain, running the computer system, and providing customer support are examples of which of the following? marketing and sales operations activities value chain

activities

GoGadget Inc., a manufacturer of multiuse tools, supplies its products to Hardware Harry's, a home improvement retail chain. GoGadget demands that Hardware Harry's create more shelf space in its stores for its products. However, Hardware Harry's refuses to do this. Instead, it decides to produce its own range of multiuse tools with its own label "Harry's Helpful Tools." In this scenario, Harry's Hardware has exercised its bargaining power as a buyer through

backward integration-Backward integration occurs when a buyer moves upstream in the industry value chain into the seller's business.

One of the reasons that Circuit City filed for bankruptcy was due to its inability to reinvest, hone, and upgrade its once-impressive resource base. Ultimately, Circuit City's core competences became

core rigidities.

In the final step of the stakeholder impact analysis, a firm dentifies its stakeholders' interests and claims. differentiates its internal stakeholders from its external stakeholders. recognizes the opportunities and threats stakeholders present. decides a course of action to address the stakeholders' concerns.

decides a course of action to address the stakeholders' concerns.

Which of the following is typically an economic responsibility of a firm? sourcing raw materials from highly developed countries paying adequate returns to the firm's stockholders on the capital invested by them donating resources, in terms of money and time, toward community development helping a nation increase its import of goods and services

donating resources, in terms of money and time, toward community development

In the AFI strategy framework, strategy analysis primarily involves evaluating the effects of internal resources and core competencies on a firm's potential to gain and sustain a competitive advantage. designing a business, corporate, and global strategy to gain and sustain a competitive advantage. organizing a firm in order to effectively put the formulated strategy into practice. deciding the type of corporate governance that would be most effective in the implementation of a strategy.

evaluating the effects of internal resources and core competencies on a firm's potential to gain and sustain a competitive advantage.

Contour Inc., a vendor, regularly supplies capacitors to All Purpose Electronics for use in its products. Therefore, Contour Inc. is All Purpose Electronics'

external stakeholder

The distribution department at Wheat, Barley and Whey Corp. has decided to adopt the FIFO (first in, first out) method of inventory to dispatch its bags of wheat. Which of the following strategies does this scenario best illustrate?

functional strategy corporate strategy master strategy business strategy

When is competitive advantage attained

generating above average returns compared to competition

LightningDrive is a leading automobile company. The company has been able to sustain its competitive advantage primarily due to its high-quality and efficient electric motors. Most of its competitors have failed to develop similar electric motors at a reasonable price. Which of the following resource attributes listed in the VRIO framework has helped LightningDrive sustain its competitive advantage? resource mobility inexhaustible nature intangibility of the company's resource high costs involved in imitation

high costs involved in imitation

Silvio is a manager at a software firm. The chief executive officer tells him that the industry as a whole has become increasingly profitable over the past five years. Based on this information, Silvio is most likely to expect

increased competition in the future, and therefore he should recommend that the company upgrade its products to slow the entry of rival companies.

Earth Mother Leisure Wear had a mission to become the leading producer of environmentally friendly leggings, an emerging and in-demand category in the apparel industry. Its strategy involved leveraging a network of organic cotton farmers and suppliers of environmentally responsible synthetic materials to create a product that is durable, attractive, affordable, and 100% recyclable. However, because it did not upgrade its outdated production facilities, Earth Mother Leisure Wear could not assemble its products at a low-enough cost to offer the leggings at a price that was attractive to customers. Earth Mother Leisure Wear's strategy failed because it failed to consider the competitive challenge. it was not backed up with strategic commitments. managers did not live by the company's core values. the company did not stake out a unique strategy position.

it was not backed up with strategic commitments.

what are the levels of the leadership pyramid

lvl 1) Highly capable individual lvl2) contributing team leader lvl3) competent manager lvl4) effective leader lvl5) executive

WeBreak4Bikes Inc. has a new U.S.-based client in the bicycle industry. The client's company produces only bicycles for riding on the road. The bicycles are used for reliable general-purpose transportation. When asked to identify a potential substitute for the bicycle industry from the five forces perspective, you would select

motorcycles- Substitutes must exist outside the given industry but still offer an attractive price/performance tradeoff.

planned emergence strategy

organizational structure and systems allow bottom-up strategy initiatives to be emerged and be evaluated by top management

A value chain analysis consists of systematically analyzing a firm's key activities that for analysis purposes are categorized into two groups:

primary activities and support activities

A firm is said to gain a competitive advantage when it accomplishes which of the following? matches its highest previous performances provides products similar to its competitors, but at lower prices performs at the same level as that of its competitors provides goods or services similar to the competitors' at a higher price

provides products similar to its competitors, but at lower prices

In the context of the resource-based model of competitive advantage, if a successful firm exhibits resource immobility it means that the rival firms have better accessibility to quality resources, which they will be able to acquire and deploy to their benefit. firm will have a sustained competitive advantage because of unique resources that are difficult for others to replicate. competitors can easily replicate or copy the firm's resource bundles and capabilities. resources of the firm cannot be effectively deployed within its own organization.

resources of the firm cannot be effectively deployed within its own organization.

Sean, a retired CEO, invests capital in a start-up company that creates budgeting software. He mentors the entrepreneur and the employees of the company because he wants the company to perform well and survive in the market. Thus, Sean is the start-up company's

stakeholder

The process that describes the method by which managers conceive of and implement a strategy that can lead to a sustainable competitive advantage is called trategic process. strategic technology. strategic management. strategic planning.

strategic management.

According to AFI strategy framework, in which of the following tasks of strategic management does a firm identify the roles strategic leaders play?

strategy analysis

LuxWear Inc., an apparel company, recently moved locations to be closer to their main manufacturer in South Carolina. The move required the firm to upgrade its legacy ordering system with its manufactures ordering system, which should facilitate its supply chain to gain future efficiencies and reap future savings. However, the new system costs $75,000 and will require a significant amount of time to train employees. This best represents a significant increase in the company's switching cost. strategic positioning. arbitrage. power of buyers.

switching costs

Who among the following is responsible for making business strategies in a large conglomerate? the board of directors at the headquarters the shareholder of the company the lower-level employees in the company the general managers of strategic business units

the board of directors at the headquarters

Amelia has recently started a restaurant in a commercial area that already has many other established restaurants and popular fast-food chains. Amelia owns the building in which her restaurant is located, rather than leasing premises as her competitors do. This factor allows her to offer her products at a more competitive price. Amelia has also invested a huge amount in designing the restaurant's interior and in equipping the kitchen with the appliances that are most widely used in her industry. In this scenario, which of the following is the most valuable resource for Amelia's business? the investments made by Amelia on the restaurant's interior the type of kitchen equipment widely used in her industry the restaurant's late entry into the market the building owned by Amelia, which reduces cost of operations

the building owned by Amelia, which reduces cost of operations

At a strategic inflection point, the more the convictions of strategic leaders deviate from reality, the more difficult it is to change course. the more likely it is the firm will be successful. the easier it is to capitalize on the opportunity. the smaller the dissonance gap.

the more difficult it is to change course.

CarTsar Inc. is a manufacturer of automobile parts, which it sells to retail auto supply stores. Its core competencies include superior design and engineering capabilities, as well as a highly integrated and efficient supply chain. To sustain its competitive advantage, CarTsar should first seek to replicate its nearest competitor's competency in innovative marketing. attempt to cut costs by replacing assembly line workers with robots. upgrade its engineering department and improve its supply chain. diversify its product offerings by developing parts for construction equipment.

upgrade its engineering department and improve its supply chain