Strat Mgmt Exam 1
A firm has 30 million shares outstanding, and each share is traded at $100. Also, each shareholder gets a dividend of $2000 annually. In this case, the market capitalization is _____.
$3 billion, that is, 30 million shares × $100
In the U.S., the time period for the right to exclude others from the use of a patented technology is _____ from the filing date of a patent application.
20 years
Osion Electronics Inc. incurs a cost of $350 to produce one unit of a cell phone. The company's management has priced the product at $600 in the market. Considering the technological advancement of the cell phone, customers perceive its value to be around $800. What is the economic value created in this scenario?
450
Postrupe Inc., a publicly traded company, has ten members on its board. Of the ten members, six members are employees of the company and includes the CEO, who also chairs the board. The board has been failing in its responsibilities toward the shareholders who now want a new board. Assuming that the total number of board members remains constant and based on information in Strategy Highlight 12.1, how many outside directors in total should serve on Postrupe's board to achieve board independence?
7
Which of the main industry groups in the SCP model is described as having a few large firms, differentiated products, and high entry barriers? A. Monopolistic competition B. Oligopoly C. Monopoly D. Perfect competition
A
Which of the following firms will most likely NOT be a complementor to a firm that manufactures computers?
A company that manufactures its own brand of desktops and laptops
White Leo Motors (WLM) Inc. generates 70-95 percent of its revenues by manufacturing luxury sports cars. However, the company also derives an insignificant percent of its annual revenues by selling its sports merchandise that includes apparel, shoes, and other accessories under the same brand name. Which of the following terms best describes WLM?
A dominant-business firm
Even though many valuable, rare, and inimitable resources were generated at Xerox's Palo Alto Research Center (PARC), the management at Xerox's headquarters failed to gain a competitive advantage by exploiting the breakthroughs in computing software and hardware. What is the most likely implication of this example?
A firm must be effectively organized to capture value.
Which of the following best illustrates forward vertical integration?
A firm that manufactures and sells car engines to major automobile companies launches its own line of cars.
Why should managers use a mechanistic structure to implement a cost-leadership strategy?
A mechanistic structure offers a centralized structure with well-defined lines of authority.
Which of the following best defines CEO duality in a board of directors?
A person holds both the role of CEO and chairperson of the board.
Golden Harvest is a restaurant located inside a five-star hotel. It caters mainly to customers who are concerned about quality dining rather than the prices. In this scenario, which of the following will be a part of Golden Harvest's strategic group?
A premium rooftop restaurant in the same city
Why did W.L. Gore reorganize itself into a functional structure from a simple structure?
A simple structure could not provide the effective division, coordination, and integration of work required to accommodate future growth.
Which of the following is NOT a stakeholder attribute that managers consider during stakeholder impact analysis?
A stakeholder's liquidity
Which of the following statements is true of accounting data?
Accounting data are historical data and thus backward-looking.
In the context of SWOT analysis, which of the following best exemplifies a firm's external opportunity?
An increase in its customers' disposable income
Neon Electronics Inc. sourced touchscreens required for its tablet computers, cell phones, and televisions from a manufacturer in China. But the demand for such components was high globally, and the supplier could not meet the quality standards of Neon Electronics. Thus, Neon Electronics decided to set up its own unit to develop and manufacture the required touchscreens. What does this scenario best illustrate?
Backward vertical integration
Why does the board of directors exist to represent shareholder interests?
Because of the separation of ownership and control
Rehman is a firm believer in Milton Friedman's view of a firm's social obligations. With which of the following statements is Rehman most likely to agree?
Businesses can use their resources to create profit as long as they do so within the rules of the game.
In the top-down strategic planning approach, all strategic intelligence and decision-making responsibilities rest primarily on the _____.
CEO
_____ describes a situation in which the cause and effect of a phenomenon are not readily apparent.
Causal ambiguity
Which of the following statements is true of a strategic position?
Choosing a strategic position requires making important trade-offs between value and cost positions.
If SA Pharmaceuticals obtains an 18 percent return on invested capital, which of the following will help determine if it has a competitive advantage over other pharmaceutical companies?
Comparing the return to the return on invested capital obtained by other firms in the industry
Which of the following statements is NOT true of competitive advantage?
Competitive advantage is an absolute measure.
While implementing strategic group mapping for the U.S. domestic airline industry, two strategic groups become apparent: low-cost, point-to-point airlines (Virgin Atlantic, Alaska Airlines, JetBlue, and Southwest Airlines) versus differentiated airlines using a hub-and-spoke system (American, Delta, and United). Which of the following statements is true about these two strategic groups?
Competitive rivalry between Virgin Atlantic and JetBlue is likely to be higher than that between American and Southwest Airlines
Organizational culture can help a firm gain and sustain competitive advantage only if the culture makes a positive contribution to the firm's economic value creation and _____.
Complies with the VRIO principles
Which of the following is an implication of low interest rates?
Consumer demand will increase.
The CEO of True West Products Inc. (TWC) is a company that sells a wide range of products. It has decided to enter the markets of emerging nations like China and Brazil. This means that the cars, consumer electronics, and services such as hotels included under the TWC banner would be made available in these nations. Which of the following strategies does this scenario best illustrate?
Corporate strategy
DS & Co. is following a related-linked diversification strategy, and GreenWing Inc. is following a related-constrained diversification strategy. How do the two firms differ from each other?
DS & Co. will share fewer common competencies and resources between its various businesses when compared to GreenWing Inc.
In the context of SWOT analysis, which of the following best exemplifies a firm's internal weakness?
Decline in the firm's market share
Due to dense urban living conditions, hot and humid summers, and high energy costs, it is not surprising that Japanese customers want small, quiet, and energy-efficient air conditioners. Which feature of Porter's diamond framework does this scenario best exemplify?
Demand conditions
As a start-up company, Virtue Mobiles Inc. entered the low end of the highly competitive cell phone industry with its low-cost smartphones. Initially, the company was able to sell its inferior technology due to its low prices. Over the years, however, its rate of technology improvements increased above the industry standards. This helped the company to create a strong strategic position for its smartphones in the high-end segment and claim a premium price. Which of the following types of innovation does this scenario best illustrate?
Disruptive innovation
_____ describes a firm's ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources over time in its quest for competitive advantage.
Dynamic capability
On which of the following tenets is the crossing-the-chasm framework, suggested by Geoffrey Moore, based?
Each stage of the industry life cycle is dominated by a different customer group.
Which of the following best illustrates site specificity?
Equipment necessary for mining bauxite and aluminum smelting
The fixed asset turnover of a company is 8.3. What do you infer from this?
Every dollar of the company's fixed assets generates $8.30 of revenue.
What does it mean for a firm to have an 80 percent learning curve?
Every time the cumulative output is doubled, the cost per unit will decline by 20 percent.
Which of the following is an ineffective practice in alliance management?
Focusing on developing an alliance-management capability in isolation
Which of the following facts demonstrates that GE's board (Strategy Highlight 12.1) is fairly diverse compared to other Fortune 500 companies?
GE's board is composed of 25 percent women, compared to an average of less than 16 percent for Fortune 500 boards.
Garnet Mobiles Inc., a cell phone manufacturing company, has its product development centers located in the U.S. and South Korea. The manufacturing units are located in China and Philippines to benefit from low-labor costs and access to original equipment manufacturers. This allows the company to competitively price its cell phones. Also, the various phone models sold by the company are uniform in all the foreign markets it operates in. In this scenario, which of the following strategies does Garnet Mobiles Inc. most likely pursue?
Global-standardization strategy
Glova Inc., a company that manufactures and sells premium perfumes, is pursuing an international strategy. RightMart Inc., a supermarket chain, follows a multidomestic strategy. Which of the following statements is most likely true of this scenario?
Glova Inc. will sell the same products and services in both domestic and foreign markets, whereas RightMart Inc. will customize its product offerings to suit local requirements.
When using the balanced scorecard approach to assess a firm's performance, which of the following is NOT a key question that managers need to answer?
How do we reduce the economic value created?
Which of the following statements accurately brings out the difference between monopolistic competition and an oligopoly?
In monopolistic competition, many firms compete against each other; in an oligopoly, there are few large firms competing against each other.
How are the critical assumptions of the resource-based model of a firm fundamentally different from the way in which a firm is viewed in the perfectly competitive industry structure?
In perfect competition, all firms have access to the same capabilities, whereas in the resource-based model, resource differences exist between firms in the same industry.
In the context of the SWOT matrix, which of the following best exemplifies a firm's internal strength?
Increase in a firm's customer loyalty
What best describes transferability of investor ownership in a public stock company?
Investors are allowed to buy, sell, and trade shares of stocks.
Which of the following is an advantage of the balanced scorecard?
It allows managers to translate a firm's vision into measureable operational goals.
Why does a firm use an organic organization combined with a functional structure when implementing a differentiation strategy?
It allows the firm to constantly upgrade core competencies in R&D, innovation, and marketing.
How did the strategic alliance between HP and DreamWorks Animation SKG affect HP?
It enabled HP to compete head on with Cisco's videoconferencing solution.
Although JetBlue used a blue ocean strategy to achieve an initial competitive advantage, it failed to maintain this advantage. Which of the following provides the best reason for this development?
It failed to refine its strategic position over time.
The average cost of production for a bottle of vitamin water in the industry is $4 while its average price is $7. StoreAll Inc. manufactures the same product for $3 per bottle and sells it for $7 per bottle. Which of the following statements is most likely true of StoreAll Inc. in this scenario?
It has a competitive advantage in the industry.
Which of the following statements is true of a disruptive innovation?
It invades the market from the bottom up, by first capturing the low end.
Which of the following is NOT an advantage of the balanced scorecard approach to assess firm performance
It is a tool which can be effectively used by managers for both strategic implementation and strategic formulation.
Which of the following statements is true of organizational culture?
It is better for founder CEOs to create a relevant culture, structure, and strategy in the early stages.
Which of the following statements accurately describes a firm's resource flow?
It is the firm's level of investments to maintain or build a resource.
Which of the following expressions accurately describes market capitalization (market cap)?
It is the product of the number of outstanding shares and the share price.
Which of the following is a drawback of pursuing a transnational strategy?
It requires a global matrix structure, which is difficult to implement.
How does horizontal integration within an industry affect the surviving firms?
It strengthens the bargaining power of the surviving firms vis-à-vis suppliers and buyers
Which of the following is a primary feature of the five forces model?
It views competition within an industry broadly to include forces such as buyers, suppliers, and the threat of substitutes.
Hoptin Inc. is a public stock company. Which of the following best exemplifies the legal personality of the company?
Jessi Hoptin, the company's founder, died a few years ago, yet the company is doing well.
True West Airlines Inc., an airline, follows a cost-leadership strategy. Which of the following firms will most likely be its direct competitor?
Jet King Airlines Inc., an airline, which follows a low-cost strategy
Which of the following statements is true of learning curves?
Learning curves can be observed in manufacturing processes and professional services.
Which of the following is an important external corporate-governance mechanism?
Market for corporate control
Which of the following situations will have greater effects from economies of scale than from learning effects?
Mass manufacturing pens
Which of the following real-world scenarios best exemplifies formalization?
McDonald's use of standard operating procedures across the world
within collins level 5 general management is
NOT 1
during growth phase of an indusrty life cycle, demand is strong
NOT a firm should harvest its products
word processor brought more ...
NOT a view
mgmt of a company is assessing the value of all tangible resources
NOT brand equity
a firm's ____ indicates how effectively it uses its working capital to generate reve
NOT break-even
most mergers ___ value
NOT create
google's purchase of waze
NOT create cost advantages
when a diversified firm ahs a market value greater than the sum of the value...
NOT diver inversion
when it is less costly for a firm to produce two or more outputs ..
NOT economies of scale
Generally, perfectly competitive industries such as paper and steel (commodities) are deemed to be ________ in profits to more differentiated industries like pharmaceuticals and cosmetics.
NOT equal
comp intensity will increase when all happen EXCEPT
NOT exit barriers are too high
rule of thumb, the ____ five forces, the ____ industry
NOT stronger, greater
when a firm faces low pressure for local responsiveness and high pressure for cost reduction it will likely adopt
NOT transnational strategy
pursuing a greenfield operation
NOT utilizes intermediaries
comp advantage is best assessed by
NOT value creation
decisions managers must make when formulating corporate level
NOT what stages of the industry
Which of the following sources of differential appeal is least effective in helping a firm sustain its advantage?
Observable product features
Onyxo Inc., a consumer electronics company, is the leading manufacturer of LCD televisions. LCD technology has been its core competency and the company holds an 80 percent share in that market. However, Onyxo Inc.'s competitors have now moved on to advance technologies like LED and 3D televisions. According to the dynamic capabilities perspective, what should Onyxo Inc. do?
Onyxo Inc. should start working on LED and 3D television technologies to adapt its core competency to suit the external environment.
Which of the following scenarios best illustrates a good stakeholder strategy?
PA Corp. distributes only 70 percent of its annual profit after tax to shareholders, while the remaining is distributed among employees and the local community, and invested for further research.
The _____ provides a model for managers' scanning, monitoring, and evaluation of changes and trends in a firm's macro environment.
PESTEL
___ incolces scanning, monitoring, and evaluating
PESTEL
HK Goods Inc. is a large conglomerate that operates only in its home country. The company competes in industries like the consumer electronics, health care, hotel, airlines, education, and steel industries. Which of the following diversification strategies does this best illustrate?
Product diversification
Which of the following is an unintended side-effect of a high degree of specialization in an organization?
Reduced employee satisfaction due to repetition of tasks
Which of the following scenarios best illustrates horizontal integration?
Regal Autos Inc. joins with Marcus Motors Inc., one of its direct competitors.
Which of the following corporate strategies did ExxonMobil pursue by acquiring XTO Energy, a natural gas company?
Related diversification strategy
Evara Inc. started as a luxury brand for designer apparel. Soon, the company expanded by launching its own line of premium perfumes, watches, bags, and home furnishings. This expansion allowed the businesses under the company to share a few, if not all, of the common competencies in products, services, technology, and distribution. Which of the following corporate strategies is Evara pursuing in this scenario?
Related-constrained strategy
How are the two approaches strategic planning and scenario planning different from strategy-as-planned-emergence approach?
Relative to strategic planning and scenario planning, strategy as a planned emergence model is a less formal and less stylized approach to the development of strategy.
Which of the following statements accurately describes a firm's resource stock?
Resource stocks are a firm's current level of intangible resources.
Jeremy, a manager at a multinational enterprise, is trying to carefully scan and link the firm's internal environment to its external environment. The insights from this analysis will allow him to effectively leverage the company's internal strengths to exploit external opportunities, while mitigating internal weaknesses and external threats. In this scenario, which of the following managerial tools is Jeremy employing?
SWOT analysis
In the smartphone industry, Google is a complementor to Samsung. Which of the following statements best explains why this is true?
Samsung's smartphones increase in value when they are pre-installed with Google's Android system.
Which of the following is an approach to the development of strategy that involves asking "what if" questions to anticipate plausible futures?
Scenario planning
Zeda is a country of English-speaking people and has a very profitable economy. Which of the following countries is most likely to be the closest to Zeda in terms of cultural distance?
Segar, where people speak English and have a low standard of living
_____ are the legal owners of public companies.
Shareholders
Jamiro Inc. is a public stock company. Which of the following statements about the company best illustrates the fact that its investors have limited liability?
Shareholders of Jamiro are responsible only for the capital they have invested.
Which of the following statements best supports the separation of ownership and control in publicly traded companies?
Shareholders own stocks but do not run the company.
Which of the following statements accurately explains a key reason behind Walmart's failure in Germany (Strategy Highlight 10.2)?
Significant differences between its U.S. personnel policies and Germany culture
Georgia Ray is the founder of the department store chain, Ether Inc. She ensures that the products in her stores are ethically and responsibly sourced. Most products are therefore 100 percent organic and manufactured from recycled material. Also, her company purchases handicrafts from non-profit organizations supporting the aged. Georgia's belief is that her company should be able to support the community at large. Which of the following terms best describes Georgia Ray?
Social entrepreneur
Which of the following statements accurately describes social entrepreneurs?
Social entrepreneurs create value in pursuit of solutions to social problems.
_____ is best described as an integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage.
Strategic Management
_____ is best described as moving one or more internal value chain activities outside the firm's boundaries to other firms in the industry value chain.
Strategic outsourcing
The productivity frontier provides a theoretical reflection of the possible best practices at any given time. Why is this an important tool for managers?
Strategic positions are not fixed, and firms have to refine their positions over time.
_____ is best described as a set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors.
Strategy
Which of the following stages of the strategic management process involves an evaluation of a firm's external and internal environments?
Strategy Analysis
Why does strategy implementation often require changes within an organization?
Strategy implementation requires a fit with the constantly changing external environment.
Keeping in mind the five forces in the airline industry, which of the following best explains the situation in the industry?
Substitutes are readily available reducing the profit potential in the industry.
Which of the following statements accurately brings out the difference between tangible and intangible resources?
Tangible assets can be bought on the open market, whereas intangible assets cannot be easily purchased.
A consumer electronics company is in the process of evaluating whether it should pursue an internal development strategy or an external growth strategy. To make this decision, the management needs to assess whether the company's internal resources are superior to those of competitors in the targeted area. Which of the following strategic management models would be most useful in this assessment?
The VRIO framework
Which of the following is a major issue at the forefront of CEO compensation in recent years?
The absolute size of the CEO pay package compared with the pay of the average employee
Which of the following is an advantage of a triple-bottom line approach?
The approach takes an integrative and holistic view in assessing a company's performance.
Which of the following frameworks used to measure competitive advantage relies on both an internal and an external view of a firm?
The balanced scorecard model
The management of a company is assessing the value of all the tangible resources the company owns. Which of the following will be included in this assessment?
The company's machinery
Which of the following external forces is a part of a firm's task environment?
The composition of the strategic group to which the firm belongs
Which of the following is a feature of the growth stage of the industry life cycle?
The consumer demand increases.
Which of the following best illustrates a strategic business unit (SBU)?
The consumer electronics division of a large company that also manufactures automobiles, apparel, and processed food
Which of the following is an example of an internal transaction cost?
The cost of maintaining a production unit
Which of the conditions below is an effect of China's one-child-per-family policy and appreciation of its currency?
The country's advantage in low-cost manufacturing has reduced.
Which of the following reasons motivated Facebook to acquire Instagram, a photo and video-sharing social media site, for $1 billion in 2012?
The desire to gain a new capability
Which of the following do the sociocultural forces in a firm's external environment best represent?
The family size of the firm's target market
The market capitalization of a public company is $5 billion. Each share of the company is traded at $200. What do you infer from this financial data?
The firm's number of outstanding shares is 25 million.
Which of the following is a drawback of using the industry life cycle as a framework to guide strategic choice?
The framework does not explain everything about changes in industries.
Which of the following factors pertaining to national competitive advantage enabled Nokia, a multinational company from Finland, to become an early leader in cell phones?
The huge demand for high-quality wireless services in Finland
Sarah has recently started a restaurant in a commercial area where there are many other established restaurants and popular fast food chains. Sarah owns the plot on which her restaurant is located and this makes her cost of operations lower than the competitors. This factor allows her to offer her products at a competitive price. Sarah has also invested a huge amount on the interiors of the restaurant and in equipping the kitchen with the latest appliances used by her competitors. In this scenario, which of the following is the most valuable resource for Sarah's business?
The land owned by Sarah, which reduces cost of operations
Which of the conditions prevail when an industry is at the end of its life cycle?
The level of process innovation reaches its maximum as firms attempt to lower cost.
While the industry for e-book readers is in its growth stage, the industry for landline telephones is in the decline stage of the industry life cycle. Which of the following can be inferred from this?
The number of competitors in the e-book reader industry will be larger when compared to the landline telephone industry.
Which of the following is one of the reasons that led to CNN, an innovator, losing its leadership position in the 24-hour cable news industry?
The second movers imitated CNN's incremental innovation to continuously improve their offering.
Which of the following is the source of the principal-agent problem in publicly traded companies?
The separation of ownership and control
Which of the following represents an economic factor in a firm's external general environment?
The stage of the business cycle that the country is in
While Burger Cult Inc. operates in a monopolistically competitive industry, Citizen Telecom Inc. operates in a monopoly. Keeping this information in mind, which of the following statements is most likely true?
The threat of new entrants will be higher for Burger Cult Inc. than Citizen Telecom Inc.
Earlier, the travel industry was controlled by a few large travel companies that booked holidays, air tickets, bus tickets, and hotels for their customers. However, with the emergence of the Internet, smaller travel agencies started mushrooming in the industry and customers started making their own reservations. Which of the following can be inferred from this information?
The travel industry changed from a consolidated structure to a fragmented one.
Which of the following approaches to assess competitive advantage is based on the view that non-economic factors can have a significant impact on a firm's financial performance?
The triple-bottom-line approach
What is most likely to happen when there is too much money in an economy?
There is an increase in prices.
How will an increase in coordinated economic and political integration between countries affect the world economy?
There will be gains in social welfare and living standards across the globe.
Why are controls like budgets and operating procedures that McDonald's implements known as input controls?
They are considered before employees make any decisions.
Which of the following is a drawback faced by multinational enterprises (MNEs) pursuing an international strategy?
They are highly affected by exchange rate fluctuations.
It appears that Google has a sustained competitive advantage because _________.
They have outperformed rivals consistently over time.
Which of the following is an advantage of equity alliances when compared to non-equity alliances?
They produce stronger ties between partners.
Which of the following is the most likely advantage of using foreign acquisitions or greenfield plants as a foreign entry mode?
They reduce a firm's exposure to loss of reputation.
Which of the following factors is most likely to lead to a loss of competitive advantage for Nike?
Too many public relations disasters combined with severe shortcomings of some of Nike's heroes
_____ is best described as a rational process in which executives at a company's headquarters take primary responsibility to program future success of the company they lead.
Top-down strategic planning
Which of the following is an external performance metric?
Total return to shareholders
_____, which is the return on risk capital, includes stock price appreciation plus dividends received over a specific period.
Total return to shareholders
True Machine Inc. and One Electrona Inc. are two competing consumer electronics companies. While True Machine's COGS/Revenue is 66%, One Electrona's is 74%. What do you infer from this financial data?
True Machine's profit margin is higher than that of One Electrona.
TrueDisk Inc. manufactures external hard disks for $32 per unit, and the maximum price customers are willing to pay is $47 per unit. SW Storage Inc. is a competitor of TrueDisk Inc. producing external hard disks for $37 per unit, for which customers are willing to pay a maximum price of $50 per unit. What does this imply?
TrueDisk creates a greater economic value than SW Storage.
Which of the following scenarios illustrates a firm that has a sustainable competitive advantage? -TrueLink Corp. was able to hold its market share of 68 percent in the social networking industry for more than three years. -Max Electrova Inc. was able to outperform its competitors with its new production system, in terms of revenue, for a brief period of four months. -SM Inc. almost doubled its sales to 8500 units this year compared to its previous year's sales of 5000 units, though the industry average is 10,000 units. -Newon Inc. generated a revenue of $300,000 this financial year, which is close to the industryl revenue average of $320,000.
TrueLink Corp. was able to hold its market share of 68 percent in the social networking industry for more than three years.
largest outflow of FDI
US
Why is it easier for new entrants to develop radical innovations when compared to incumbent firms?
Unlike incumbent firms, new entrants do not have formal organizational structures and processes.
Which of the following management tools will help determine whether a firm's resources, capabilities, and competencies are strengths or weaknesses?
VRIO framework
Both Vibrant Phones Inc. and Oryxo Inc. incur a cost of $200 to manufacture a single unit of a cell phone. However, Vibrant Phones creates more economic value than what Oryxo does. What does this imply?
Vibrant Phones sells its products at a more attractive price than Oryxo.
In which of the following situations is pursuing an international strategy advisable?
When a firm enjoys a large domestic market, strong reputation, and brand name
When does a firm fall into the large competitive chasm between early adopters and early majority?
When it fails to successfully appeal to characteristics of the early majority
Which of the following features about a buyer indicates that the buyer has high bargaining power?
When the products the buyer purchases are undifferentiated.
When does a merger between companies typically occur?
When two firms of comparable size join to form a combined entity
Beans Inc. operates in a perfectly competitive agricultural industry. Classica Apparel Inc., in contrast, operates in a monopolistically competitive industry. Keeping this information in mind, which of the following statements is true?
While Classica Apparel Inc. will have some power to set the prices for its products, Beans Inc. will have little or no ability to do so.
While cell phones with holographic keyboards are currently in the introduction stage of the industry life cycle, tablet computers are in the growth stage. In the context of this scenario, which of the following statements is true?
While the industry for cell phones with holographic keyboards will focus on product innovation, the tablet industry will focus on process innovation.
The tenet behind the triple bottom line is that:
a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy.
W.L. Gore & Associates (Strategy Highlight 11.2) is organized in such a way that it has no formal job titles, job descriptions, or chains of command. This implies that it has:
a low level of formalization.
The strategic objective of a first mover during the introduction stage of the industry life cycle is to:
acheive market acceptance
When a large, existing firm buys a startup company, the transaction is generally described as a(n) _____.
acquisition
Which of the following is not included within the types of strategic alliances?
acquisitions
modes of entering a foreign market has the highest level of investment and control
acquisitions
Octa Autos Inc. wants to globally expand its market. It intends to ensure that its mode of foreign entry allows it to have strong control over its operations and protect its intellectual property, though it may mean investing a significant amount of capital and other resources. In this scenario, which of the following foreign entry modes would best suit Octa Autos Inc.?
acquistiion
The perfectly competitive industry structure differs from the resource-based model in its view that:
all firms have access to the same resources.
Curve Inc. is a software development firm based in California. It strives to provide highly differentiated software at cheaper prices when compared to its competitors. Which of the following organizational designs should Curve Inc. implement to ensure the maximum success of its business strategies?
ambidectrous
which of the following stages of the strategic management involves an evaluation of external and interal
analysis
Moving into international markets is a particularly attractive strategy to firms whose domestic markets
are saturate or near saturation
Investments in specialized assets tend to incur high opportunity costs because the:
assets have significantly greater value in their intended use than in their next-best use.
True Empire Autos Inc. is an automobile company known for its luxury cars and follows a differentiation strategy. In this scenario, True Empire Autos should ideally compare its strategic position with a(n) _____.
automobile company that sells high-end, premium cars
The typical four-step innovation process begins with A. the modification and recombination of an existing product or process. B. the presentation of an idea as findings derived from basic research. C. the commercialization of an invention by entrepreneurs. D. a competitor's attempt to imitate an innovation.
b
Soapsuds Inc., a manufacturer of cleaning agents, supplies its products to All Needs Inc., a supermarket chain. It demands that All Needs create more shelf space in its stores for Soapsuds' products. However, All Needs Inc. refuses to do this. Instead, All Needs decides to produce its own range of cleaning agents with its own label "All Wash." In this scenario, All Needs Inc. has exercised its bargaining power as a buyer through _____.
backward integration
In a successful _____ strategy, the trade-offs between differentiation and low cost are reconciled.
blue ocean
Which of the following is an important internal corporate-governance mechanism?
board of directors
corporate strategy is concerned with determining ___ amound geo
boundaries of the firm
Scenario planning typically begins with managers:
brainstorming to identify multiple plausible futures.
When entering a foreign market, it is advisable for a new venture that has a core competency only in R&D to form a strategic alliance with a local partner because:
building downstream complementary assets can be expensive and time-consuming.
details the goal-directed actions managers take in their quest for comp advan
bus-level
org and mgmt skils find their expression in a company's structure, routines, and culture
capital gains
In an industry, the threat of entry is high when:
capital requirements are low.
_____ are strategic business units that compete in a low-growth market but hold considerable market share.
cash cows
A firm's resources and capabilities are costly to imitate. This is because rival companies do not clearly understand the relationship between the resources and capabilities controlled by the firm. In this case, the firm's competitive advantage is protected against imitation by _____.
causal ambiguity
It is difficult even for Apple's managers to pinpoint the underlying reasons for the company's phenomenal success. The term that best applies to this difficulty is known as _____.
causal ambiguity
firm to formulate an effective bus-level strat, keep in mind comp advan
characteristics of both the industry and the firm
A successfully implemented blue ocean strategy allows a firm to
charge a higher price than the cost-leader in the industry.
A firm that achieves superior performance relative to other firms in the same industry or the industry average has a(n) _____.
comp advantage
New Communications Inc. is a newspaper publishing company whose average return on invested capital is approximately 5 percent. Because newspaper publishing is a declining industry, the industry average has been negative (-5 percent) for the last few years. In this scenario, New Communications Inc. has a _____.
comp advantage
Underperformance relative to other firms in the same industry or the industry average results in a(n) _____ for a firm.
competitive disadvantage
BYD is an example of a new firm entering the global auto industry. With more firms vying for a U.S. market that is not growing very fast, what will happen?
competitive intensity is likely to increase
All of the following are external stakeholders except which of the following?
competitors
A _____ is best defined as a company that combines two or more strategic business units under one overarching corporation and follows an unrelated diversification strategy.
conglomerate
When a firm does not have the resources required for pursuing a growth strategy, and if the resource in question is not easily tradable, the implication for the strategist is most likely to:
consider an outright acquisition.
To help a firm achieve a competitive advantage, each distinct activity performed in the value chain needs to:
contribute to the firm's strategic position as either low-cost leader or differentiator.
_ are best described as unique strengths embedded deep within...
core competencies
The pharmaceutical company Merck's new drug Vioxx was a blockbuster, generating revenues of $2.5 billion a year by 2002 and growing fast. When allegations began to surface in the medical community that the firm had suppressed evidence of negative side-effects during clinical trials, Merck announced the voluntary withdrawal of Vioxx from the market. In this example, Merck provides an example of what can happen if a company deviates from its _____.
core values
Due to political instability in the country of United Mapa, the strategic leaders at the headquarters of FT Supplies Inc. have decided to divest the company's business from the foreign market in United Mapa. This decision would be applicable to all the business units of FT Supplies Inc. operating in United Mapa. Thus, this is decision reflects the _____ area of strategy formulation.
corporate
strat leadership pertains to use of power and influence by ___ to direct actiivites of others
corporate executives
One of the ways to foster ethical behavior in employees is to:
create a control system that encourages desired values.
Firms pursuing a differentiation strategy primarily seek to:
create higher customer perceived value than the value that competitors create.
Threadless (Strategy Highlight 5.2.) is a community-centered online apparel store that leverages user-generated content. The idea is to turn consumers into prosumers, a hybrid between producers and consumers. Members of the Threadless community do most of the work, which they consider fun: They submit T-shirt designs online, and community members vote on which designs they like best. The designs receiving the most votes are put in production, printed, and sold online. It can be said that Threadless uses the _____ technique.
crowdsourcing
_____ is best described as a process in which a group of people voluntarily performs tasks that were traditionally completed by a firm's employees.
crowdsourcing
CAGE framework
cultural
Which of the following is an example of a firm's external stakeholder?
customers
focused cost leadership strategy
delivers low-cost products to specific, narrow
In a firm's external environment, _____ primarily capture population characteristics related to age, gender, family size, ethnicity, sexual orientation, religion, and socioeconomic class.
demographic trends
economic value
difference between V and C
homesmart inc
differentiation
A differentiator is least likely to be threatened by increases in input prices due to powerful suppliers when the:
differentiator is able to create a significant difference between perceived value and current market prices.
NOT a reason firms expand abroad
dominate domestic markets
A drawback of joint ventures is that they may be characterized by:
dual reporting lines.
A firm incurs costs of $400 to manufacture a television. In the market, customers are willing to pay a maximum of $600 for the television priced at $500. The difference of $200 ($600 minus $400) is the _____.
economic value created
PureRinse Inc. is a brand reputed for its wide variants of body wash that introduced its range of shampoos and skin moisturizers a few years ago. Since most of its products could be produced using the same resources and technology, the company's cost structure decreased, while its product portfolio widened. In this scenario, which of the following value and cost drivers is PureRinse applying?
economies of scope
stakeholder power and influence will vary by industry. on eof the key stakeholders for firms in this industry (investment banking) is
employees
Today, many companies use PeopleSoft and EDS to avoid maintaining a human resource management system. By doing this, these firms are:
engaging in strategic outsourcing.
In the aircraft manufacturing industry for large commercial jets, Boeing and Airbus are the only competitors. There is not a significant threat of entry because:
entering the aircraft manufacturing industry requires huge capital investments.
After Jeff Bezos read about how the Internet was growing by 2,000 percent a month, he set out to use the Internet as a new distribution channel and founded Amazon, which is now the world's largest online retailer. This is clearly an example of a(n):
entrepreneur who commercialized invention into an innovation.
Top-down strategic planning works best when the:
environment does not change much.
___ alliances tend to produce stronger ties and greater trust between partners than ____
equity; non-equity
AFI, internal analysis includes
evaluating the effects
Janet is a 23-year-old employee at DR Products Inc. As a millennial, she will tend to:
expect her company to be socially responsible.
non-equity alliance firms tend to share
explicit knowledge
non-equity alliances typically involve sharing ___ knowledge and equity share____
explicit; tacit
firm expanding into foreign market and needing to test engage in
exporting
State-level government agencies that check whether firms are meeting statutory safety measures in their production units are considered to be the firms' _____.
external stakeholders
Which of the following terms or phrases best characterizes Zappos' organizational structure (Chapter Case 11)?
extremely flat
Google, the leader in online search and advertisement, engaged in a number of smaller acquisitions of tech ventures. It did this in order to:
fill gaps in its competency lineup.
A differentiation strategy works best when a:
firm has intangible resources, is able to pass on increases in supplier cost to the customer, and its differentiation appeal creates customer loyalty.
In the context of the resource-based model of competitive advantage, if a successful firm exhibits resource immobility it means that the:
firm will have a sustained competitive advantage because of its unique resources.
____ measures how a company uses its fixed assets to generate revenue
fixed asset turnover
In contrast to a differentiator, a cost leader will:
focus its research and development on process technologies to improve efficiency.
McDonald's uses detailed standard operating procedures throughout the world to ensure product quality. This implies that McDonald's has a high degree of _____.
formalization
Industry convergence is a process whereby:
formerly unrelated industries begin to satisfy the same customer need.
Which of the following modes of entry comparatively requires the lowest levels of investment and control?
franchising
Photohome is a file hosting service that allows users to store up to 5GB of data with no restrictions or charges. However, users have to pay a fee for advanced features on the cloud storage system and additional storage space. Which of the following business models does this best illustrate?
freemium
_____ are primarily responsible for decisions and actions within their respective departments like finance, human resources, marketing, and production in a strategic business unit.
functional managers
Trader Joe's successfully uses a blue ocean strategy by offering lower cost food than Whole Foods for the same market of patrons. By doing this, Trader Joe's is able to
gain market share and make up the loss in margin through increased sales.
Toyota is selling its hybrid Prius vehicle, built on global platforms, successfully in 80 countries. This information best supports the assumptions made under the:
globalization hypothesis.
a firm building a new plant
greenfield operation
In which of the following stages of the industry life cycle is a standard first established?
growth stage
Intel's Celeron chip and Atom chip are initiatives to:
guard the company against disruptive innovation by protecting the low end of the market.
which of the following statements is true of accounting data?
historical data and therefore tend to be backward-looking
values articulate by firm answers
how do we accomplish our goals
general manager of a SBU would be concerned with
how to compete
A form of self-delusion in which managers convince themselves of their superior skills in the face of clear evidence to the contrary.
hubris
reasons firms enter into alliances include all of the following except
increase comp intensity
SyncTouch Inc. is a manufacturer of cell phones. It has released an improved version of its smartphone in markets in which the company already operates. Which of the following types of innovations does this scenario best illustrate?
incremental innovation
A factor favoring the success of disruptive innovation is that:
incumbent firms are slow to change.
Each stage of the vertical value chain typically represents a distinct _____ in which a number of different firms are competing.
industry
The risk of employee opportunism on behalf of agents in a public stock company is exacerbated by _____.
information asymmetry
An intrapreneur is described as a person who:
innovates within existing companies.
Coda Inc. is an apparel manufacturer. The management at Coda prefers moderate control over the operations of the different departments such as R&D, design, marketing, and sales. It allocates a budget to each function at the beginning of each quarter. This is an example of implementing control through _____.
input controls
comp advantage is more likely for a firm with high utilization of
intangible
an effective ___ strategy successfully reconciles trade offs bw diff and low cost
integration
according to the notion of strategy as planned emergence, outcome of rational and structured top-down
intended strategy
integration business level strat differs form a low cost strat
intent of an integration strategy is not to be the absolute lowest-cost
The value chain describes the:
internal activities a firm engages in when transforming inputs into outputs.
differentiator is somewhat insulated form the effect
it may offer enough differential appeal
Dow Corning is a company owned by Dow Chemical and Corning. This is most likely an example of a(n) _____.
joint venture
When a standalone organization is created and owned by two or more parent companies together, the strategic alliance is referred to as a(n) _____.
joint venture
Competitive advantage goes to the firm that achieves the:
largest economic value created.
The government of Filvia has mandated that the standard minimum wage in the country be increased to $8,000 per year. This has ensured that all firms in the country pay their employees at least $8,000 per year, which has brought about a higher standard of living for the people of Filvia. Which of the following factors in a firm's general environment does this mandate best indicate?
legal factors
Nathan is part of a sales team. He effectively coordinates his tasks with others in the team and willingly contributes to their efforts in achieving the team's objectives. Thus, Nathan is in _____ of the Level-5 leadership pyramid.
level 2
Riccarda is a manager. Her colleagues and subordinates look to her as a person who typically does the right things. Along with other skills, her ability to effectively organize and deploy resources like labor, material, and money has been appreciated by her supervisors. According to the Level-5 leadership pyramid, which of the following levels would be the immediate next step for Riccarda?
level 4
disadvantages of going global are the costs fo doing
liability of foreignness
According to the Level-5 leadership pyramid, a manager in Level 1 is primarily characterized as:
making productive contributions through motivation, talent, knowledge, and skills.
In Eli Lilly's Office of Alliance Management, the alliance champion is primarily responsible for:
making sure that an alliance fits within the firm's existing alliance portfolio and corporate-level strategy.
FlyOne Airway's decision to acquire TrueGear Fuels Inc. proved to be ill-fated because its managers had overestimated their abilities and skills. They believed that they had the skills to manage such diversified businesses and create additional shareholder value. However, the acquisition failed to create the anticipated synergies because the managers' capabilities were restricted to the airlines industry. What does this scenario best illustrate?
managerial hubris
principal-agent problems can lead to acquisitoins that do not result in increased value
managers may acquire a firm to build their own prestige power and pay
5 C-P, ____an industry structure characterized by many firms with some pricing power....
monopolistic comp
Balmia Ammunition Inc., a firm controlled and managed by the government of Balmia, is the only company that has the license to produce defense arms in the country. Which of the following industry competitive structures does this best illustrate?
monopoly
Rajat Gupta's role in providing inside information to Galleon Group for the benefit of Galleon Group's stockholders and Rajat Gupta himself is an example of _____.
moral hazard
comp rivalry among firms in the same strat group
more intense than comp between strat groups
Some of the best engineering and car companies are in Germany. Thus, it can be concluded that Germany has a _____ in the automobile industry.
national competitive advantage
FindFriend is an instant messaging application for smartphones. New smartphone users find it easier to connect with friends and relatives through this mobile app when compared to other similar instant messaging applications. Hence, it has the largest user base in the industry. Thus, FindFriend app's value has increased primarily due to its _____.
network effects
most commonly used alliance
non-equity
India has been able to carve out a competitive advantage in business process outsourcing (BPO) primarily because:
of an abundance of well-educated, English-speaking young people.
A key concern for a firm pursuing a blue ocean strategy should be to
offer a differentiated product or service at a low cost.
Vibgyor TV Inc. is a large production company that controls a major portion of the movie industry's market share along with two other firms. Despite its competitiveness with the two other firms, it is influenced by their actions and often has to consider their strategic actions before acting on its own. In this scenario, Vibgyor TV Inc. is most likely functioning in a(n) _____ industry.
oligopolistic
_____ are best described as the value of the best forgone alternative use of the resources employed.
opportunity costs
A particular organization is characterized as having a flexible division of labor, distributed decision-making, and generalized knowledge of how to accomplish strategic goals valued. This organization is most likely _____ in nature.
organic
If a firm pursues only a differentiation strategy, it is most likely a(n) _____ organization.
organic
Plow Inc. is a greeting card manufacturing company. Plow's market dominance exists primarily because of the innovative designs of its greeting cards when compared to those of its competitors. In this scenario, Plow Inc.'s managers must ideally rely on a functional structure that resembles a(n) _____.
organic organization
Zappos' 10 core values that define what it means for employees to be working at Zappos also define the _____ of Zappos.
organizational culture
According to the Level-5 leadership pyramid, a manager at Level 3 has acquired the ability to:
organize resources effectively to accomplish predetermined goals.
_____ are board members who are not employees of the firm but frequently are senior executives from other firms or full-time professionals.
outside directors
Adidas acquired Reebok primarily to _____.
overcome its competitive disadvantage against Nike
A _____ is best described as a form of intellectual property that gives the inventor exclusive rights to benefit from commercializing a technology for a specified time period in exchange for public disclosure of the underlying idea.
patent
a firm's pestel environment includes ___ forces
political, legal, economic, tech
A key reason behind Google's decision to acquire the Israeli startup company Waze for $1 billion was to:
preempt its competitors from buying Waze.
five forces model, a risk to a firm iwth differentiation when focus competition switches to
price rather than features and new acceptable levels of quality have emerged due to innovation
In a generic value chain, a firm's after-sales service will be referred to as its _____.
primary activity
The managers at Movo Automobile Inc. want to diversify their business by acquiring a consumer electronics company. This acquisition would mean increased job security, higher compensation, and greater decision-making authority for the managers. The managers correlate this acquisition with greater power for them rather than to the appreciation in shareholder value. In this scenario, this acquisition by Movo Automobile is most likely a result of:
principal-agent problems.
PepsiCo operates in many countries and sells a wide variety of carbonated soft drinks, other beverages, different types of chips, and Quaker Oats goods to achieve continuous growth. From this data, we can conclude that PepsiCo has been involved in _____.
product-market diversification
A firm is said to gain a competitive advantage when it can:
provide products similar to its competitors, but at lower prices.
DFS Electronics Inc. ensures that all its products are highly durable and reliable by using techniques like zero-defect and lean manufacturing systems. These efforts not only add to the products' differential appeal, but also help the company save costs during production and avoid expenses due to after-sales services. Thus, the common value and cost driver responsible for DFS Electronics' strategic position as an integrator is (the)
quality
Incumbent firms favor incremental innovation over radical innovation because:
radical innovation tends to disrupt the existing power distribution within the firms.
Connect Plus Cellular is a leading mobile network operator. Since most of the resources used by Connect Plus Cellular is easily available, the company's brand name is the only resource that distinguishes it from the other operators. No other competitor in the industry has a strong brand name like that of Connect Plus Cellular. This unique asset that has helped the company gain a competitive advantage will be considered as a(n) _____ resource in the VRIO framework.
rare
The "Gold Crisps" potato wafers manufactured by True Foods Inc. have been the highest selling wafers in the market. Though the market for wafers is flooded with competitors, True Foods Inc. has been able to maintain its market position for a long time. This is mainly attributed to the unique taste of the wafers that comes from the unique natural flavoring used by the company. This competency of True Foods Inc. will be considered as a(n) _____ resource in the VRIO framework.
rare
A firm is said to have a competitive advantage over its rivals when it:
reaches the productivity frontier.
research indicates that with respect to the diversification performance relationsihp
related diversification strategies are associated....
Due to resource immobility, a critical assumption in the resource-based model of a firm, the:
resource differences between firms last for a long time.
assumption under the resource-based model that firm resources and capabilities differ across firms and that this leads to performance differences
resource hetergeneity
_____ is best described as the process of reorganizing and divesting business units and activities to refocus a company in order to leverage its core competencies more fully.
restructuring
____ indicates what proportion of a firm's sales is converted into profits
return on revenue
from investors perspective the measure of comp advan matters most
return on risk capital
firms pursuing related diversification create value through ___ and ____
scale and scope
To make the SWOT analysis an effective management tool, a strategist must first:
scan a firm's internal and external environments.
when managers envision diff what if situations
scenerio
When a firm is said to be pursuing a geographic diversification strategy, it means that the firm will:
sell its products in several different regional, national, and international markets.
The productivity frontier represents a(n):
set of best-in-class strategic positions the firm can take relating to value creation and low cost at a given point in time.
A core tenet of stakeholder strategy is that a:
single-minded focus on shareholders alone exposes a firm to undue risks that can threaten the very survival of the enterprise
An observer may conclude that the organizational culture of Zappos, an online retailer for shoes and clothing, might be the basis for its competitive advantage. However, reverse social engineering to crack Zappos' code of success might be much more difficult for a company trying to exactly imitate its strategy. Thus, the source of Zappos competitive advantage is said to be _____.
socially complex
____factors capture society's tastes, preferences, attitudes
sociocultural
_____ describes the degree to which a task is divided into separate jobs.
specialization
Voluntary arrangements between firms that involve the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services.
strategic alliance
During market testing, Elixir Cosmetics (EC) realized that the cosmetics industry was dominated with multiple, well-established brands. These brands mostly sold their products in exclusive outlets and departmental stores. A new entrant like EC would require a different business model to be successful. Thus, EC started selling its products through direct marketing. In this scenario, Elixir Cosmetics accomplished substitution primarily through _____.
strategic equivalence
A traditional top-down strategic planning process typically begins with:
strategic leaders adjusting a company's vision and mission based on environmental analysis.
A firm's _____ relates to its ability to create value for customers (V) while containing the cost to do so (C).
strategic position
relates to create value for customers while containing cost to do so
strategic position
FindFor Inc. is an e-commerce retail firm that sells a variety of merchandise online. Through services like cash on delivery, easy return, and online tracking, the company has created more customer value than its competitors (brick-and-mortar businesses) at the same price. Also, the company's costs are substantially low due to minimal investment in operation and administration. In this scenario, FindFor Inc. has most likely been able to provide superior value and cost control through _____.
strategic positioning
When a firm makes choices between a cost or value position to achieve competitive advantage, it is primarily involved in _____.
strategic trade-offs
a set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors
strategy
Through _____, a firm puts its guiding policy into practice by employing a set of coherent actions.
strategy implementation
in a swot, managers derive "offensice strategic alternatives by pairing or matching
strenths and opps
strategic group
sub group of firms within an industry that compete on similar dimensions
Which of the following business models has been traditionally used by the magazine and newspaper industry?
subscription based
Mia has purchased an Internet package for three months, in which she can use 30 mbps Internet speed. However, for the service, she needs to pay a fee of $50 in advance irrespective of whether she uses the Internet during the service period or not. This arrangement best illustrates the _____ strategy.
subscription-based
Talk Age Inc., a telecommunication company, had been drastically losing its market share due to tough competition in the industry. Management hired a reputable consulting firm to advise the company. The experts from the consulting firm pointed out that the company lost its competitive advantage primarily due to its tedious internal policies and procedures. These ineffective policies and procedures made the company operations, marketing, and after sales service inefficient. Talk Age Inc. can best solve its problem by working on its _____.
support activities
The strategic objective of businesses during the shakeout phase of the industry life cycle will primarily be to:
survive by drawing on "deep pockets."
customer-oriented vision statements ____ than product-oriented vision statements
tend to be more flexible in adapting to changing environmental conditions
Which of the following stakeholders of a company would most likely be responsible for formulating a corporate strategy?
the CEO
The MBA oath first developed at Harvard and now signed by students at over 300 business schools is modeled after _____.
the Hippocratic oath in medicine
What does blue ocean strategy attempt to reconcile?
the conflicting requirements of two generic strategies
company that uses cost-leadership strategy achieves a competitive advantage
the economic value that the firm creates is greater than that of the competition
If a resource for a particular firm is rare, then:
the firm will have a temporary competitive advantage.
A firm's strategic position is likely to be strong when:
the gap between the value the firm's product generates and the cost to produce it is large.
The conflict in a principal-agent relationship arises when:
the goals of the principals and agents are not aligned with each other.
An intended strategy is best described as:
the outcome of a rational and structured, top-down strategic plan.
Organizational design is:
the process of creating, implementing, and modifying the structure of an organization.
The administrative and political distance between two trading countries reduces when:
there is a well-functioning capital market in the host country.
In a public stock company, senior executives, such as the CEO, face agency problems when:
they delegate authority of strategic business units to general managers.
Firms within emerging economies may want to form strategic alliances with firms from developed countries because __________.
they might gain access to the foreign firms
Why are differentiation and cost-leadership strategies referred to as generic business strategies?
they require similar strategic positions in order to increase
During the process of formulating an effective business model, a firm's managers should first:
transform their strategy of how to compete into a blueprint of actions and initiatives.
A(n) _____ arises out of the combination of high pressure for local responsiveness and high pressure for cost reductions.
transnational strategy
Using the _____ approach, managers audit their company's fulfillment of its social and ecological obligations to stakeholders such as employees, customers, suppliers, and communities as conscientiously as they track its financial performance.
triple bottom-line
In a firm, a strategist's job should be to:
understand the complex web of exchange relationships among different stakeholders.
The primary objective of Porter's five forces model is to:
understand the profit potential of different industries.
related-constrained diversification means
use common resources, capabilities, and competencies
In the context of SWOT analysis, a firm can develop an offensive strategic option primarily by:
using its internal strengths to exploit external opportunities.
_____ denotes the dollar amount a consumer would attach to a good or service.
value
A blue ocean strategy tends to be successful only if a firm is able to rely on a _____ that allows it to reconcile trade-offs.
value innovation
The pursuit of both differentiation and low cost at the same time in a way that creates a leap in value for both the firm and consumers is called
value innovation
Combining the dimensions of a firm's __________ and __________ tells us which generic business strategy the firm will pursue. A. Economies of scope; economies of scale B. Five forces; economies of scope C. Scope of competition; core capabilities D. Strategic position; scope of competition
value prop and comp scope
Decisions relating to "what stages of the industry value chain to participate in" determine a firm's:
vertical integration
the biotech firm genetech licensed
vertical strategic alliance
When it would cost the firm less to pursue an activity in-house than obtaining that activity from a supplier in the external market, then the firm should:
vertically integrate
tangible resources are
visible, physical, or codified
mission statement describes
what a bus actually does and why
As a part of strategy formulation, corporate strategy concerns questions relating to:
where to compete
corporate strat is concerned with _ and bus is w _
where to compete; how to compete
risk of cost leadership
NOT focus on comp can shift to emphasis on price
form an econ value created perspective, volume of goods or services sold driven by reltaionship bw _ and _
NOT how value is created; how customers view the firm
acquisitions may result in reduced comp intensity
NOT initiating hostile takeovers
cost leader is somewhat insulated form the effect of bargaining power of suppliers because
NOT it may offer enough differential appeal
vertical int. involves all of the following EXCEPT
NOT level of ownership
not a criterion for strategically important resource
NOT not every firm has it
stockholders are
NOT product market stakeholders
major decision generated from a change in corp strat
NOT providing superior CS
True Sync Inc. is a software company, which has built and acquired numerous assets over the years. According to the resource-based view of a firm, which of the following assets of True Sync Inc. will best enable it to gain and sustain a competitive advantage?
NOT resources of the company that are mobile
An ideal competitive environment from a profit-making standpoint is when:
NOT rivalry is moderate and entry/exit are low
the idea that the market price of a firm's stock includes all publicly available info
NOT shareholder knowledge hyp
process or method managers formulate and implement strategy leaders rely on different appraoches that can complement one other
NOT strategy as planned emergence
NOT one of the advantages in an equity alliance
NOT strong tie
according to the integration-responsiveness framework...
NOT transnational strategy
Unlike financial ratios based on accounting data, total return to shareholders is:
an external performance metric.
in 2010, exxon mobil posted 19.3 billion...
competitive;absolute
Stakeholder Strategy
effectively managing a diverse set of stakeholders
The productivity frontier function is concave, and it captures the:
trade-off between value creation and production cost.
_____ is best described as a measure of how effectively capital is being used by a firm to generate revenue.
working capital turnover