Strategic Management Exam 1

_______ looks at both strategic and financial objectives when measuring company performance. A. Balanced scorecard approach B. Strategic inflection point C. Financial ratio approach D. None of the above

A. Balanced scorecard approach

The _______ is/are charged with evaluating and compensating a company's senior executives. A. Board of Directors B. Management C. Shareholders D. All of the above E. None of the above

A. Board of Directors

Microsoft's current mission statement says: "To empower every person and every organization on the planet to achieve more". As such, theirs would be considered a _________________. A. Broad mission statement B. Narrow mission statement C. Broad vision statement D. Narrow vision statement

A. Broad mission statement

Shareholders, management and board of directors are three people that participate in the: A. Corporate governance B. Corporate entrepreneurship C. Leadership organization D. Ethical organization

A. Corporate governance

TalkaLot is a cell phone manufacturing company. Its latest range of smartphones are visually similar to the Y-series range of smartphones from Talkie Gen, in terms of shape, look, and feel. Which of the following strategies has TalkaLot used to replicate the valuable and rare resource of Talkie Gen? A. Direct imitation B. Strategic equivalence C. Substitution D. Innovation

A. Direct imitation

Currency exchange rates would be considered part of the macro environnment's __________ factors. A. Economic B. Global C. Demographic D. Sociocultural E. Political/Legal

A. Economic

Retailers like Nordstrom and Macy's have no manufacturing operations. That is because of ______. A. Interrelationships B. Resource-based view of the firm C. Tangible resources D. Intangible resources

A. Interrelationships

Which of the following statements regarding competitive parity and competitive advantage is accurate? A. Some firms develop valuable, rare, and costly-to-imitate resources and capabilities in being efficient second movers, that is, in rapidly imitating and improving on the product and technological innovations of other firms. B. Firms that benchmark their performance against the performance of successful competitors can expect to develop at least a temporary competitive advantage. C. Firms must be first movers to gain competitive advantages. D. Even if all a firm does is create value in the same way as its competitors, the firm can expect to earn at least a temporary competitive advantage.

A. Some firms develop valuable, rare, and costly-to-imitate resources and capabilities in being efficient second movers, that is, in rapidly imitating and improving on the product and technological innovations of other firms.

Resources in the resource based view are defined as the tangible and intangible assets that a firm controls, which it can use to conceive and implement its strategies. A. True B. False

A. True

Strategic management has two fundamental questions: How should we compete in order to create a competitive advantage in the marketplace? and how can we create competitive advantages in the marketplace that are unique, valuable, and difficult for rivals to copy or substitute? A. True B. False

A. True

Strategic management involves analysis, decisions, and actions. A. True B. False

A. True

Within the VRIO framework, valuable resources and capabilities are also known as strengths. A. True B. False

A. True

Within the VRIO framework, valuable resources and capabilities are not valuable are also known as weaknesses. A. True B. False

A. True

Green Frog is an environmentally friendly firm in the cosmetics industry. If Green Frog undertook an analysis to help it understand which of its resources and capabilities are likely to be sources of competitive advantage and which are less likely to sources of such advantages, it would be performing a(n): A. internal analysis. B. external analysis. C. WACC analysis. D. economic analysis.

A. internal analysis.

A company's strategic plan consists of: A. Its balanced scorecard and its business model B. A vision of where it is headed, a set of performance targets, and a strategy to achieve them. C. Its strategy and management's specific, detailed plans for implementing it. D. A company's plans for improving value-creating internal processes. E. A strategic vision, a strategy, and a business model.

B. A vision of where it is headed, a set of performance targets, and a strategy to achieve them.

Cost levers (factors that can be manipulated to achieve cost leadership) are always tangible resources, while value levers (factors that can be manipulated to achieve differentiation) are always intangible. A. True B. False

B. False

Louise owns a large portion of Sturdy Appliance's stock. However, she is not employed by the company. In this scenario, Louise is the company's A. External stakeholder B. Internal stakeholder C. Non-stakeholder D. Internal shareholder E. External shareholder

B. Internal stakeholder

Zara incorporates new technologies and process the enhancement of capability to meet customer needs. It is an example of: A. Inimitability B. Organizational capabilities C. Sustainable competitive advantage D. None of the above

B. Organizational capabilities

In general, as long as the number of firms that possess a particular valuable resource or capability is less than the number of firms needed to generate perfect competition dynamics in an industry, that resource or capability can be considered ________ and a potential source of competitive advantage. A. Valuable B. Rare C. Inimitable D. Non-substitutable

B. Rare

The 'R' in VRIN stands for ________________. A. Valuable B. Rare C. Inimitable D. Non-substitutable

B. Rare

To protect shareholders from the failed oversight that lead to many infamous corporate scandals, Congress passed the _______________________ in 2002. A. Dodd-Frank Act B. Sarbanes-Oxley Act C. Americans with Disabilities Act D. None of the above

B. Sarbanes-Oxley Act

Mama Mia's' Pizza & Calzone has been trying to directly copy the strategies of Fuhgeddaboudit Pies. Even though it is evident that the success of Fuhgeddaboudit Pies comes from the freshness and variety of ingredients it uses, Mama Mia's has not been able to introduce the same types of produce into its recipes. This is because Fuhgeddaboudit's network of relationships with local growers, as well as its efficient supply chain, are very difficult to emulate. Which of the following barriers to imitation does this scenario best illustrate? A. Path dependence B. Social complexity C. Resource mobility D. Resource homogenity

B. Social complexity

When automobile magazines face competition from automobile blogs on the web, which of the following forces in Michael Porter's five forces model primarily gets stronger? A. The Threat of New Entry B. The Threat of Substitutes C. Bargaining Power of Buyers D. Bargaining Power of Suppliers

B. The Threat of Substitutes

Within the five forces framework, the five most common threats facing firms from their competitive environment include each of the following except A. substitutes. B. complementors. C. suppliers. D. buyers.

B. complementors.

An appropriate substitute for a Coke would be: A. Water B. Soda C. Candy bar D. Coffee E. Orange juice

C. Candy bar

Louis Vuitton makes handbags that are considered by many to be the height of luxury. With prices as high as $150K per bag, it is clear that the company is using a ____________________ competitive strategy. A. Quality differentiation B. Technology differentiation C. Focused differentiation D. Prestige differentiation

C. Focused differentiation

IKEA is one of the largest furniture retailers in the world. They provide inbound logistics, operations, outbound logistics, marketing and sales activities, and service. IKEA is an example of: A. Tangible resources B. Intangible resources C. Primary activities D. Support activities

C. Primary activities

According to Henry Mintzberg, the strategy that will ultimately determine an organization's success or failure is its: A. Harvesting strategy B. Consolidation strategy C. Realized strategy D. Turnaround strategy

C. Realized strategy

Which of the following statements accurately describes a firm's resource stock? A. Resource stocks are a firm's level of resources that are common to competitors. B. Resource stocks are a firm's future estimate of both tangible and intangible resources. C. Resource stocks are a firm's current level of intangible resources. D. Resource stocks are a firm's level of investments to maintain or build a resource.

C. Resource stocks are a firm's current level of intangible resources.

The aging of the U.S. population would represent a(n) _______________________ for a business seeking to understand their business environment. A. General environment B. Demographic environment C. Sociocultural force D. Political/legal environment E. Technological environment

C. Sociocultural force

Which of the following matches the correct company with the generic business-level strategy that practices? A. Wal-Mart practices a broad differentiation strategy. B. Toyota practices a broad low-cost strategy. C. Southwest Airlines practices a focus low-cost strategy. D. Costco practices a focus differentiation strategy. E. Nordstrom practices a focus low-cost strategy.

C. Southwest Airlines practices a focus low-cost strategy.

________ make a wide variety of raw materials, labor and other critical assets available to firms. A. Buyers B. Rivals C. Suppliers D. Substitutes

C. Suppliers

Which of the five forces is Starbucks answering when it repeatedly upgrades and refreshes its stores and offerings? A. Bargaining Power of Buyers B. Bargaining Power of Suppliers C. Threat of New Entrants D. Threat of New Substitutes

C. Threat of New Entrants

Focus strategy can be defined as the strategy: A. of merging with an established company to gain monopoly over the market. B. a company uses when it decides to allocate the company resources equally among all the marketing segments. C. a company uses when it decides to serve a limited number of segments, or just one segment of the market. D. a company uses when it decides to ignore the different needs of different market segments to produce one standardized product for all the customers. E. of closing one or more business units in order to minimize the losses.

C. a company uses when it decides to serve a limited number of segments, or just one segment of the market.

The two types of measures of competitive advantage include: A. accounting measures and strategic measures. B. strategic measures and economic measures. C. accounting measures and economic measures. D. qualitative measures and quantitative measures.

C. accounting measures and economic measures.

All of the following are elements of the general environment except: A. technological trends. B. demographic trends. C. industrial trends. D. cultural trends.

C. industrial trends.

The difference between the concept of a company mission statement and the concept of a strategic vision is that: A. A mission concerns what to do to achieve short-run objectives and a strategic vision concerns what to do to achieve long-run performance targets B. The mission is to make a profit, whereas a strategic vision concerns what business model to employ in striving to make a profit C. A mission statement deals with what to accomplish on behalf of shareholders and a strategic vision concerns what to accomplish on behalf of customers D. A mission statement typically concerns a company's present business scope (who we are and what we do); whereas, the principal concern of a strategic vision is the company's long-term direction and future product-market-customer-technology focus E. A mission statement deals with where we are headed, whereas a strategic vision provides the critical answer to how will we get there.

D. A mission statement typically concerns a company's present business scope (who we are and what we do); whereas, the principal concern of a strategic vision is the company's long-term direction and future product-market-customer-technology focus

Which of the following statements is true about turnaround strategy? A. A strategy that reverses a firm's decline in performance and returns it to growth and profitability. B. A process of restructuring and transforming the company from loss to profitability. C. A need for turnaround may occur at any stage in the life cycle but is more likely to occur during maturity or decline. D. All of the above E. None of the above

D. All of the above

All of the following are stakeholders except which of the following? A. Customers B. Creditors C. Alliance Partners D. Competitors

D. Competitors

Which one of the following is not one of the five stages of an ongoing, continuous strategic management process? A. Forming a strategic vision of the company's future direction and focus B. Setting objectives to measure progress toward achieving the strategic vision C. Crafting strategy objectives to achieve the objectives and get the company where it wants to go D. Developing a profitable business model E. Implementing and executing the chosen strategy effectively and efficiently

D. Developing a profitable business model

Yankee Candle Company offers customers candles that burn for 50-60 hours, much longer than most department store candle brands. Therefore, customers are willing to pay a higher price for these candles. Which of the following strategies is Yankee Candle Company following? A. Cost leadership strategy B. Rapid growth strategy C. Market segmentation strategy D. Differentiation strategy E. Stuck-in-the-middle strategy

D. Differentiation strategy

The Honda Accord offers a great combination of values for its customer. While it does not provide the highest level of luxury or performance, it is clearly a step up from entry level automobiles present in the market. As such, the Accord represents an example of the execution of _________________________. A. Differentiation strategy B. Focus strategy C. Combination strategy D. Integration strategy

D. Integration strategy

If TechnoGeek and VarsityBlue compete in the same market for the same customer and TechnoGeek generates $900 of economic value each time it sells a product or service while VarsityBlue generates $400 of economic value each time it sells a product or service, TechnoGeek has a(n) ________ of $500. A. perceived benefit B. economic value C. cost advantage D. competitive advantage

D. competitive advantage

Effectively communicating the strategic vision down the line to lower-level managers and employees has the value of: A. making it easier for top executives to set strategic objectives. B. helping lower-level managers and employees better understand the company's business model. C. helping company personnel understand why "making a profit is so important. D. not only explaining "where we are going and why" but more importantly, also inspiring and energizing company personnel to unite to get the company moving in the intended direction.

D. not only explaining "where we are going and why" but more importantly, also inspiring and energizing company personnel to unite to get the company moving in the intended direction.

According to Michael Porter's Five Forces Model, _______ must be viewed broadly to encompass other forces in an industry. A. Entrants B. Buyers C. Suppliers D. Substitutes E. Competitors

E. Competitors