Strategic Management Exam#1 (Ch.1-6)
________________________ will tell you whether or not a particular competency is a source of competitive advantage. a. SWOT b. VAIO c. VRIO d. OREO e. SWAT
C. VRIO
Identifying key success factors is part of the _____________ task in the AFI framework. a. formulation b. action c. implementation d. analysis e. foundational
D. Analysis
What is the primary distinction between a strategic vision and a mission statement? a. A strategic vision portrays a company's future business whereas a company's mission statement typically describes its present business and purpose. b. A mission statement is usually very broad whereas a strategic vision is usually very specific. c. The distinction does not exist as strategic vision and mission statement are two names for the same concept. d. A mission statement portrays a company's future business whereas a company's strategic vision typically describes its present business and purpose. e. A strategic vision is usually a long and comprehensive statement whereas a mission is a usually a brief statement.
A. A strategic vision portrays a company's future business whereas a company's mission statement typically describes its present business and purpose
Deciding an organization's structure is part of the ______________ stage(s) of the strategy process. a. Analyzing b. Implementing c. Formulating d. Formulating and Implementing e. Analyzing and Formulating
A. Analyzing
Competitive rivalry is the strongest between firms that _________________________. a. are in the same strategic group b. are in the same industry c. are located in the same geographic area d. share the same available compliments e. share the same bank
A. Are in the same strategic group
Strategy is the quest to gain and sustain advantage, and involves all of the following except: a. Combining activities to stake out a unique position b. Deciding what to do and what not to do c. Benchmarking your rivals d. Making long-term commitments e. Containing costs while creating value
A. Combining activities to stake out a unique position
Milton Friedman's tenet that the only appropriate role of a business is to maximize its shareholders' value runs directly counter the core tenet of: a. Corporate social responsibility b. Strategic analysis c. Economic responsibility d. Stakeholder strategy e. Firm effects
A. Corporate social responsibility
As discussed in class Operation Desert Storm, the successful war waged to remove invading Iraq from Kuwait in 1991, was based on one of several possible operations pre-planned for the Kuwait Invasion scenario. The Officers in charge implemented the ______________, the one that best matched the situation and assumptions used to develop the plan to the reality on the ground in the Middle East. a. dominant strategic plan b. emergent strategic plan c. realized strategic plan d. intended strategic plan e. vision statement
A. Dominant strategic plan
For an American clothing manufacturer that has dominated, yet saturated its domestic market ____________ would represent an appropriate opportunity. a. expanding into the European market b. a growing interest in American cars overseas c. exporting clothing to the Chinese market d. identifying a new use for socks e. a shortage of affordable clothing in the European market.
A. Expanding into the European Market
In putting together its balanced scorecard, a company should consider its stockholders to be: a. Internal Stakeholders b. External Stakeholders c. Secondary Stakeholders d. Competitors e. Tangible Assets
A. Internal Stakeholders
While __________ responsibilities have always been required of businesses by both internal and external stakeholders, socio-cultural change has resulted in _________ responsibilities being expected of today's businesses a. Legal, Ethical b. Economic, Legal c. Philanthropic, Ethical d. Ethical, Economic e. Ethical, Legal
A. Legal, Ethical
The pharmaceuticals lobby has been quite effective in helping to shape the healthcare debate that's been raging in Washington for the last five years. As such, they would be considered a ____________ force for the healthcare industry. a. political b. legal c. sociocultural d. technological e. economic
A. Political
According to Mintzberg, the strategy that will ultimately determine an organization's success or failure is its: a. realized strategy b. emergent strategy c. unrealized strategy d. vision e. intended strategy
A. Realized Strategy
Core competencies can be used to leverage ______________ to create competitive advantage for a company. a. Resources b. Firm activities c. Superior firm performance d. Capabilities e. Reinvestment
A. Resources
Congress passed the Clean Air Act in response to the public's newfound environmental concerns and outrage over what it (the public) perceived to be unrestrained corporate pollution. In response, a number of industries such as utilities and automobile manufacturers have had to make dramatic changes in the technology used in the creation and operation of their products. These industries are responding to a change in the ________________ environment that was brought about by changes in the ________________ environment. a. technological, political-legal b. technological, sociocultural c. Political-legal, technological d. Sociocultural, political-legal e. political-legal, sociocultural
A. Technological, Political-legal
Having a competitive advantage doesn't always guarantee competitive success. a. True b. False
A. True
Recruiting top managers from outside of a company is an excellent way to insure that a company's Board of Directors is considered both independent and an external stakeholder, thereby insuring appropriate oversight of top management decisions and actions. a. True b. False
A. True
Acme, Inc.'s canine propulsion technology (CPT) is considered both valuable and practically impossible to substitute for in the Geococcyx acquisition industry. Unfortunately, due to a mix-up in Acme's patenting process, CPT is widely used across the industry. This technology would therefore represent a source of ___________ for Acme. a. competitive parity b. temporary competitive advantage c. sustainable competitive advantage d. competitive disadvantage e. wasted opportunity
A. competitive parity
It is always better to have a customer-oriented mission rather than a product-oriented mission because: a. It allows more wiggle room for the company to respond to shifts in the competitive environment b. It provides for a narrower organizational focus c. It provides for a broader organizational focus d. It is never better to have a customer-oriented mission rather than a product-oriented one. e. It is not always better to have a customer-oriented mission rather than a product-oriented one.
A. it allows more wiggle room for the company to respond to shifts in the competitive environment
Labor unions were formed specifically to increase the ____________________. a. bargaining power of buyers b. bargaining power of suppliers c. rivalry among competitors d. the barriers to entry for potential new entrants e. threat of substitutes
B. Bargaining power of suppliers
The decision by Great Britain to leave the European Union (Brexit) caught the entire world off guard and is expected to destabilize the global economy for the foreseeable future. As such, it is an example of a(n): a. Industry Effect b. Black Swan Event c. Firm Effect d. Competitive Disadvantage e. Urgent Claim
B. Black Swan Event
Compared to "smart phone company," "telecommunications company" would represent a ___________________ mission definition. a. roughly equal b. broader c. narrower d. vision component of a e. top-down
B. Broader
The text points out that while Apple clearly has many VRIO core competencies, not even the company's managers can fully explain its success. This lack of clear cause and effect is referred to as _________________. a. Social complexity b. Causal ambiguity c. Path dependence d. Dynamic capabilities e. An intangible resource
B. Casual Ambiguity
In 1984, General Motors and Toyota created a joint venture called New United Motor Manufacturing, Inc. (NUMMI) which was a manufacturing plant in California that simultaneously built cars for both companies and resulted in efficiencies for both. This arrangement would best be described as ________________. a. cooperation b. co-opetition c. a merger d. a strategic alliance e. complementing
B. Co-Opetition
The author of your text adds ____________________ as a sixth force to Porter's original five. a. barriers to entry b. complements c. competitors d. stakeholders e. dynamism
B. Complements
Microsoft's decision to enter the telephone hardware business by acquiring Nokia's phone division was an example of a __________________ strategy a. functional b. corporate-level c. business-level d. strategic business unit e. global
B. Corporate-level
The power of the buyers is high when: a. There are many buyers. b. Each purchases large quantities relative to the size of a single seller. c. Buyers face large switching costs. d. The industry's products are differentiated. e. Buyers cannot credibly threaten backward integration.
B. Each purchases large quantities relative to the size of a single seller
Currency exchange rates would be considered part of the macro environment's _____________ factors: a. political b. economic c. industrial d. social e. global
B. Economic
To maximize the likelihood of attaining a competitive advantage, a firm should concentrate on maximizing its _______________. a. Sustainability b. Economic Contribution c. Industry effects d. Strategic leadership e. Technological Change
B. Economic Contribution
Organizations with mission statements won't always outperform those without mission statements. a. True b. False
B. False
Rivalry among competitors is likely to be strongest when the industry is in the ____________ stage of its lifecycle. a. introduction b. growth c. mature d. declining e. stage makes no difference
B. Growth
The threat of new entrants into the personal computer industry is relatively low because the industry has become so mature and commoditized that it's almost impossible to turn a profit, even for its current players. The dominant forces determining performance in this industry appear to be: a. Economic value creation b. Industry effects c. Firm effects d. Strategic Management e. Other effects
B. Industry Effects
The 'O' in VRIO stands for ________________. a. opportunity b. organized to capture value c. organizational complexity d. organizational inertia e. organizational values
B. Organized to Capture Value
The environmental analysis that looks at the natural environment plus aspects of the societal environment is called the _____________________. a. Five forces analysis b. PESTEL analysis c. Opportunity analysis d. STEP analysis e. Competitive analysis
B. PESTEL Analysis
If your company is dynamic industry whose future is difficult to predict, your best/most appropriate approach to "strategizing for competitive advantage" would be: a. Planned emergence b. Scenario planning c. Strategic intent d. Strategic planning e. Proforma statements
B. Scenario planning
Microsoft's recent entry into the telephone hardware business via its acquisition of Nokia's phone division is an example of: a. Strategic initiative b. Strategic intent c. Strategic vision d. Strategic mission e. Scenario planning
B. Strategic intent
Research has shown that the most impactful factor in determining firm performance is: a. Company Strategy b. The industry a company competes in. c. Management's actions d. The global economy e. A variety of factors and unexplained variance
B. The industry a company competes in
According to _________________ theory, organizational outcomes are determined to a great extent by the values of the members of the top management team a. Top-down strategic planning b. Upper-echelon c. Level-5 leadership d. Autonomous actions e. Dominant strategic planning
B. Upper-echelon
If I want to determine which products/services would be considered substitutes for the product/service offered by a particular company, I would best consults its: a. vision statement b. mission statement c. objectives d. business model e. policies
B. mission statement
Having economies of scale as a key success factor in an industry usually represents _____________. a. An opportunity for a small start-up hoping to break into the industry b. An economy of scope c. A barrier to entry for a small start-up hoping to break into the industry d. An exit barrier for a small start-up hoping to break into the industry An irrelevant factor for a small start-up hoping to break into the industry
C. A barrier to entry for a small start-up hoping to break into the industry
Recruiting and training a company's new employees would be considered _____________________. a. a primary activity-supply chain, operation, distribution, marketing/sales b. a secondary activity c. a support activity d. inbound logistics e. a simple structure
C. A support activity
Deciding how the production department will cut costs to support the firm's cost leadership position represents: a. functional strategy b. corporate strategy c. business strategy d. business plan e. Business model
C. Business Strategy
Today's smartphones are a combination computer, telephone, camera, audio and video player all wrapped up in a single handheld device. As such they represent a classic case of: a. Diversification b. Industry convergence c. Complementing d. Co-opetition e. Forward integration
C. Complementing
In looking to buy a new personal computer, many feel much more confident in the purchase if they see the "Intel inside" sticker on the box. In this regard, Intel would be considered a _______________ to the computer industry. a. substitute b. driving force c. complementor d. co-opetition e. rival
C. Complementor
Microsoft's current mission statement says: "At Microsoft, our mission and values are to help people and businesses throughout the world realize their full potential." As such, theirs would be considered a _________________. a. narrow mission statement b. product-oriented mission statement c. customer-oriented mission statement d. strategic intent e. stakeholder-oriented
C. Customer-oriented mission statement
A ____________ vision (mission) is generally more flexible than a ____________ vision (mission). a. Product-oriented, Value-oriented b. Value-oriented, Customer-oriented c. Customer-oriented, Product-oriented d. Product-oriented, Customer-oriented e. Top-down, Emergent
C. Customer-oriented, Product-oriented
Tanner, Inc. has managed to earn a healthy profit in an industry that is generally considered unprofitable. The probable cause for Tanner's outstanding performance is: a. Economic value creation b. Industry Effects c. Firm Effects d. Strategic Management e. Other effects
C. Firm Effects
After years of hard work and accomplishment, Sheila was promoted to the general manager level. As such, she would be expected to develop ______________ strategy. a. corporate-level b. business-level c. functional-level d. emerging e. realized
C. Functional-level
Opportunities and threats are found in the firm's_________________________. a. internal environment b. mission statement c. general and competitive environments d. competitive environment e. general environment
C. General and Competitive Environments
An organization's patents are part of its __________________: a. raw materials b. resource immobility c. intangible assets d. tangible assets e. dynamic capabilities
C. Intangible assets
The fact that Southwest Airlines only flies one type of plane helps make it one of the most efficient airlines in the industry. However, it also prevents SWA from offering the variety of flights that Delta and United can offer and would therefore be considered a(n) ________________ in the airline industry. a. entry barrier b. exit barrier c. mobility barrier d. driving force e. oligopolistic force
C. Mobility Barrier
Compared to "beverage company," "cola company" would represent a ___________________ mission definition. a. roughly equal b. broader c. narrower d. vision component of a e. top-down
C. Narrower
Forming a union is intended to give employees __________ relative to their employer they might not otherwise have. a. Legitimacy b. Urgency c. Power d. Positioning e. Firm Effect
C. Power
You are tasked with developing a strategic plan for a high tech software company. While working your way through the strategic planning process, it becomes obvious that the industry's future competitive environment will be impossible to predict with any degree of accuracy. Your best option for completing your tasking would be to use: a. prediction markets b. extrapolation c. scenario planning d. strategic initiative e. emergent strategy
C. Scenario planning
Today's HDTV's are the result of significant R&D investments made by the Japanese company NHK starting in 1970. It took over two decades for the first HDTV's to find their way to market. This investment is a clear example of ____________ on NHK's part. a. vision b. emerging strategy c. strategic initiative d. strategic commitment e. intended strategy
C. Strategic initiative
Unrealized strategy is usually the consequence of _________________. a. Bottom-up emergent strategy b. Scenario planning c. Unpredictable events d. Top-down strategic planning e. Resource allocation process
C. Unpredictable events
Avon was originally founded as a vehicle for selling an aspiring author's books. When his books didn't sell as quickly as he expected, he hit upon the idea of including a small bottle of perfume with each book as a marketing gimmick. The perfume turned out to be more popular than the books and a cosmetic empire was born. Avon's near-century of success in the cosmetics industry is a classic example of a(n) _______________ strategy resulting from a(n) ______________ strategy. a. emergent, intended b. realized, emergent c. unrealized, emergent d. realized, intended e. intended, unrealized
C. Unrealized, Emergent
If I were interested in finding out what a company wants to accomplish I would refer to its ____________________. a. mission statement b. culture c. vision statement d. mission statement e. business plan
C. vision statement
The Dallas Cowboys of the National Football League have one of the most talented collections of players in professional (American) football. They have not been able to translate this roster into competitive advantage on the field. From a resources-based view, they appear to lack _____________. a. Valuable resources b. Rare resources c. Inimitable resources d. An organization capable of capturing and exploiting value e. They don't lack anything and will win the Super Bowl this year (not really a viable option).
D. An organization capable of capturing and exploiting value
Pepsi has worked long and hard to reach the point where it can match Coke's domestic performance. As such, Pepsi has developed a(n) ____________ in the domestic market. a. competitive advantage b. Sustainable competitive advantage c. competitive disadvantage d. competitive parity e. core competency
D. Competitive parity
If Wal-Mart were to decide to enter the automobile distributor business, this would represent a monumental shift in that industry and over time would fundamentally change its competitive landscape. Wal-Mart's entry into this market would represent a ____________________ originating from the ________________ environment for the automobile distributor's industry. a. key success factor, internal b. driving force, societal c. key success factor, competitive d. driving force, competitive e. key success factor, natural
D. Driving force, competitive
Tanner, Inc. opened a factory on the shores of Lake Conan 5 years ago in order to provide the cooling water it needed for its manufacturing process. Lake Conan had been polluted by runoff from other factories and had seen its fish and other wildlife populations dwindle as a result. As part of its cooling process, Tanner routinely filters incoming and outgoing water so the water flowing back into Lake Conan is actually cleaner than the water coming out of it. As a result, the fish population of the lake is actually recovering. The improved fishing would be considered a(n) _____________. a. Customer Surplus b. Externality c. Ecomagination Program d. Firm Effect e. co-opetition
D. Firm Effect
Vision statement should be: a. Realistic and rational b. Forward looking and rational c. Realistic and inspiring d. Forward looking and inspiring e. Current and rational
D. Forward looking and inspiring
_______________ industries tend to be less profitable than ____________________ ones. a. Consolidated, monopolistic b. Consolidated, fragmented c. Fragmented, perfectly competitive d. Fragmented, consolidated e. Short, tall
D. Fragmented, Consolidated
Research suggests that strategic leaders spend most of their time: a. Working alone b. At public events c. Reviewing data d. In face-to-face meetings e. Dictating policy
D. In face-to-face meetings
According to your BusinessWeek, defense contractors are overjoyed since Trump told members of ______________ that they can no longer rely on the United States to carry much of the load for the organization/alliance. a. the United Nations Peace Keepers b. the TPP c. the World Trade Organization d. NATO e. ITT Tech
D. NATO
The soft drink industry, dominated by Coke and Pepsi would be considered to have a(n) _________________________ industry structure. a. monopolistic b. perfectly competitive c. global d. oligopolistic e. monopolistically competitive
D. Oligopolistic
_______________ is a strategy process in which organizational structure and systems allow bottom-up strategic initiatives to emerge and be evaluated and coordinated by top management. a. Scenario planning b. Realized planning c. Top-down strategic planning d. Planned emergence e. Serendipity
D. Planned emergence
The two critical assumptions of the resource based model are: a. Resource tangibility and intangibility b. Resources and capabilities c. Competitive advantage and superior firm performance d. resource heterogeneity and immobility e. none of the above
D. Resource heterogeneity and immobility
The aging of the U.S. population would represent a(n) _______________________ for a business seeking to understand their business environment. a. ecological force b. political-legal force c. key success factor d. sociocultural force e. economic force
D. Sociocultural Force
In the biggest international trade news of his administration to date, President Trump signed an executive order withdrawing the United States from ___________. a. North American Free Trade Agreement (NAFTA) b. the World Trade Organization (WTO) c. North Atlantic Trade Organization (NATO) d. the Trans Pacific Partnership (TPP) e. West Atlantic Logistics and Merchantile Alliance of Retail and Transportation
D. The Trans Pacific Partnership
An appropriate substitute for a Coke would be _____________. a. a Pepsi b. a Sam's Cola c. a generic cola brand d. a candy bar e. There is NO substitute for Coke!
D. a candy bar
The Consumer-price index increased 2.1% in December, its largest increase in almost 3 years. This could support additional moves by the Federal Reserve to _____________. a. reinstitute quantitative easing b. discontinue quantitative easing c. lower interest rates d. raise interest rates e. change leadership in advance of Friday's inauguration
D. raise interest rates
A high level of competition (rivalry) within an industry can be viewed as: a. a barrier to entry b. a sign that the industry is in the mature stage c. a negative in assessing the attractiveness of the industry d. a relatively expensive way of conducting business for industry participants e. all of the above
E. All of the Above
In class, we have often talked about how Wal-Mart uses its superior distribution system to dominate the various industries it enters. As such, this distribution system would be considered a _____________: a. resource. b. capability. c. Resource base. d. competency. e. core competency
E. Core Competency
Construction of Nashville's Music City Center began in 2010 and was completed May 2013. Three years of construction meant traffic congestion, loss of parking, less foot traffic, resulting in fewer potential customers and lost revenue for the businesses near the construction site. Some suggest that these traffic and parking issues have continued with the Center in full operation. Owners of adjacent businesses can only hope that the MCC will bring in enough additional business for them to overcome the __________ that its construction and operation created. a. Competitive Disadvantage b. Firm Effects c. Industry Effects d. Economic Value e. Externalities
E. Externalities
Industry attractiveness can be determined by all of the following except: a. Entry and exit barriers b. Substitutes and complements c. Rivalry and co-opetition d. Buyer and supplier power e. None of the above
E. None of the Above
Volkswagen's decision to install technology in its cars that fooled emissions testing equipment into believing that standards were being met when they actually weren't resulted in a great deal of additional profit for the company (until they got caught, of course) and its shareholders. As such, it is clear that Volkswagen's leadership was most interested in the adhering to the ____________level of the Pyramid of Corporate Social Responsibility. a. Philanthropic Responsibilities b. Ethical Responsibilities c. Economic Responsibilities d. Legal Responsibilities e. None of the above
E. None of the above
The______________ looks at capabilities and competencies as sources of competitive advantage. a. Position school of management b. SWOT theory c. Value Chain d. Dynamic capabilities perspective e. Resource-based view
E. Resource-based view
Bocala Springs, Inc. owns the rights to the only water supply within 500 miles of Bocala, Arizona and supplies all of the residents and businesses in the bustling town with a population of 1234. Consequently, the structure of the water industry in the greater Bocala Metropolitan Area would best be described as: a. An oligopoly b. Perfect competition c. Monopolistic competition d. A monopoly e. A natural monopoly
E. a natural monopoly
Tanner, Inc. has grown from an up and coming company to a global conglomerate that has diversified into hundreds of different, though related industries. The fact that they now offer so many products presents a unique challenge to the _________ approach to measuring competitive advantage. a. Economic value creation b. Accounting profitability c. Shareholder value creation d. Balanced scorecard e. Triple-bottom line
a. Economic value creation
A drawback of using accounting data to measure competitiveness is that it only captures tangible assets. a. True b. False
a. True
As companies have gained more experience with the technique, the Balanced Scorecard has proven to be an excellent tool for strategic implementation. a. True b. False
a. True
Balanced scorecard measures are generated by brainstorming answers to all of the following questions except: a. What is our impact on the natural environment? b. How do shareholders view us? c. What core competencies do we need? d. How do we create value? e. How do customers view us?
a. What is our impact on the natural environment?
The department in charge of providing the raw materials that go into making a company's product would be considered _____________________. a. a primary activity b. a secondary activity c. a support activity d. inbound logistics e. a simple structure
a. a primary activity
With a limited marketing budget, I need to know which of my industry rivals I most need to concentrate my negative advertising on. Generally, this will be the one(s) trying to get the same customers I'm trying to get, and in pretty much the same way. One tool that I can use to make this determination would be: a. a strategic group map b. SWOT c. an SFAS d. a Five forces analysis e. STEEP analysis
a. a strategic group map
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. best-cost/integration strategy b. differentiation strategy c. cost leadership strategy d. price leadership strategy e. balanced scorecard
a. best-cost/integration strategy
Microsoft's decision to enter the telephone hardware business by acquiring Nokia's phone division represent strategy at the: a. corporate level only b. business and operating levels c. business, functional, and corporate levels d. business level only e. beginning of fiscal year
a. corporate level only
Wal-Mart uses its world famous distribution system to efficiently move various products and product categories through its supply chain. Wal-Mart used this core competency to gain competitive advantage in the retail, grocery, and pharmaceuticals industries, thereby benefitting from: a. economies of scale b. economies of scope c. integration strategies d. experience curve e. learning curve
a. economies of scale
The main difference between best-cost strategy and blue ocean strategy is _____________. a. innovation b. cost c. price d. being stuck in the middle e. value
a. innovation
By definition, competitive advantage is always ________________. a. relative b. absolute c. permanent d. sustainable e. tangible
a. relative
Of all its characteristics, the aspect of competitive advantage that should provide the most hope for a brand new start-up in an established industry is the fact that it is ____________. a. relative b. objective c. easily sustainable d. transitory e. rare
a. relative
"We will do well in ROI by June of next year" does not qualify as a SMART goal because it is clearly not: a. Specific b. Measurable c. Attainable d. Relevant e. Time-Specific
a. specific
From 2005 to 2010, Abbott's stock price outperformed that of Pfizer. Abbott also paid more generous dividends over the same period. Given this information, I can confidently state that Abbott enjoyed a five-year competitive advantage over Phizer. However, my confidence is only well-founded if the __________ turns out to be true. a. stock price b. efficient-market hypothesis c. book value d. accounting data e. time value of money
a. stock price
Business historians will argue for decades about just how much the charisma and salesmanship of Steven Jobs was worth to Apple. In trying to measure Apple's competitive advantage, the _________ approach would struggle the most with this question. a. Economic value creation b. Accounting profitability c. Shareholder value creation d. Balanced scorecard e. Triple-bottom line
b. Accounting profitability
In order for a company to rely solely on the ____________ approach to measuring competitive advantage, it has to believe that past performance accurately predicts future performance. a. Economic value creation b. Accounting profitability c. Shareholder value creation d. Balanced scorecard e. Triple-bottom line
b. Accounting profitability
The Apple App Store pricing model for iOS applications in which app developers set a price for the applications and Apple retains a percentage of the revenue from apps sold is an example of a(n) ______________ business model. a. Freemium b. Agency c. Razor-razorblades d. Wholesale e. Pay as you go
b. Agency
The _________________ approach harnesses multiple internal and external performance metrics in order to access company performance. a. Accounting profitability b. Balanced scorecard c. Shareholder value creation d. Economic value creation e. Triple bottom line
b. Balanced Scorecard
Answering the fundamental question, "How will we compete in this industry?" is the purview of: a. Corporate-level strategy. b. Business-level strategy. c. Functional-level strategy. d. The mission statement. e. The vision statement.
b. Business-level strategy
Unlike accounting data, total return to shareholders is a(n) __________________ performance metric. a. internal b. external c. objective d. stable e. dynamic
b. External
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
_________________________ help(s) to measure relative profitability, which is useful when comparing firms of different size. a. Shareholder value b. Financial ratios c. Customer valuation d. competitive advantage e. Book value
b. Financial ratios
A firm's stock market valuation is determined primarily by its ________________________. a. book value b. intangibles c. dividend payouts d. competitive advantage e. profit
b. Intangibles
One method of tying your recommended courses of action for a company to its main issues identified in your analysis of the company would be to use a(n) _________________. a. SWOT analysis b. SWOT matrix c. PESTEL analysis d. 5-forces analysis e. Resource-based analysis
b. SWOT matrix
Kellham Industries has worked hard to improve its quality control culture, which is now almost on par with that of the better companies in its industry. It is clear, then that through its extraordinary effort Kellham has developed a(n) ______________ for the company. a. opportunity b. capability c. competitive advantage d. core competency e. tangible resource
b. capability
It stands to reason that the greater the consumer's ___________, the better he or she feels about the deal at the time of purchase. a. producer surplus b. consumer surplus c. price d. value e. economic value created
b. consumer surplus
Having economies of scale would be most useful if you were attempting to execute a(n) _____________ strategy. a. integration b. cost leadership c. differentiation d. focused differentiation e. focused cost leadership
b. cost leadership
It's difficult to imagine a jumbo jet large enough to carry 1000 people at t time. It has also been suggested that having a craft that large would be very inefficient and difficult to load and unload in a timely manner, and cleaning it between flights (turnaround) would take hours. While the engineers could probably think of a way to get something that large off the ground, every other aspect of its operations would no doubt keep it stuck at the gate. Its size would thus be considered a _________________. a. scale economy b. diseconomy of scale c. scope economy d. diseconomy of scope e. strength
b. diseconomy of scale
The concept that combines learning by doing and process innovation is _____________________. a. learning curve b. experience curve c. economy of scope d. differentiation e. cost leadership
b. experience curve
Sustainable competitive advantage is best gained through a company's _____________. a. tangible assets b. intangible assets c. key success factors d. driving forces e. strategic activities
b. intangible assets
Many consider Fred Astaire and Ginger Rogers to be the greatest dancing duo in American film history. Individually, they were great dancers but something "inexplicable" and almost magical happened when they danced together. The studios tried to recreate that magic with various partner combinations, but it was clear that the ____________ of their interaction with one another made the pair impossible to duplicate. a. resource flows b. social complexity c. social ambiguity d. path dependence e. strengths
b. social complexity
A________________________ is the result of the simultaneous pursuit of performance along social, economic, and ecological dimensions. a. sustainable competitive advantage b. sustainable strategy c. balanced scorecard d. consumer surplus e. profit
b. sustainable strategy
As a newly-minted Massey College of Business grad and recently-hired manager at HCA, you are asked to do an analysis of the company and its environment and recommend strategic actions your research suggests would best position HCA for the dynamic future of the healthcare industry. One opportunity you identify for the company is: a. to expand into the fast-growing Southwest United States. b. the demographic shift to an older U.S. population. c. increasing rate of law suits being brought against hospitals. d. to diversify to provide walk-in clinics for rural areas. e. to shift away from the Medicare and Medicaid markets.
b. the demographic shift to an older U.S. population
Unlike the other forces in Porter's (5 forces +1) competitive analysis, suppliers and buyers are considered part of an industry's: a. distinctive competencies b. value chain c. support activities d. macro environment e. task environment
b. value chain
Which of these are the two key variables in Porter's generic competitive strategies model? a. Resources and markets b. Primary markets and secondary markets c. Cost and volume d. Time and cost e. Strategic position and competitive scope
c. Cost and volume
President Trump caught Wall Street bankers' (positive) attention by signing an executive order that appeared to give teeth to his promise to "do a big number on" ____________. a. executive compensation b. Sarbanes-Oxley c. Dodd-Frank d. corporate taxes e. Mexican imports
c. Dodd-Frank
_________________ is the approach the marketing department would take to achieve company objectives and maximize resource productivity. a. Corporate strategy b. Business strategy c. Functional Strategy d. Operational Strategy e. Objectives
c. Functional strategy
In developing a SWOT analysis, a single force: a. Can simultaneously be a strength and an opportunity. b. Can simultaneously be a weakness and a threat. c. Cannot simultaneously be a weakness and a threat ONLY ONE THAT IS WRONG d. Can simultaneously be a threat and a strength. e. Cannot simultaneously be a threat and an opportunity
c. cannot simultaneously be a weakness and a threat
For over 58 years, McDonald's has had a partnership with Coca-Cola to provide sodas with its burgers and fries for people who couldn't imagine eating them any other way, and creating a ___________ that enhances the dining experience of McDonald's customers. a. sustained competitive advantage b. producer surplus c. complement d. competitive advantage e. customer surplus
c. complement
Philips' recent efforts to divest its lighting business reflects the recognition of the need to adapt its resources and capabilities to the shifting forces in and around its various businesses and is therefore indicative of a(n) ________________. a. driving force b. key success factor c. dynamic capabilities perspective d. strategic activity system e. intangible resource perspective
c. dynamic capabilities perspective
Imogen & Willie's of Nashville will make you a custom pair of jeans for about $300. At Make Your Own Jeans.com, you can get an equally custom pair of jeans for around $60. Why the huge difference in price? I&M makes your jeans individually by hand, while MYOJ.com makes a pair that fits you like a glove using huge machines, computers, and a process known as mass customization. The difference in price is possible because of: a. mass production b. learning curve c. economies of scope d. experience curve e. economies of scale
c. economies of scope
In his practice, Dr. Cosar uses a dieocrillsalator, one of three such machines in the western hemisphere. While his patients have first crack at the machine and its wondrous powers, Dr. Cosar quickly realized that in order to earn a return on this very expensive asset, he was going to have to let other physicians as well as some practitioners outside the medical profession (the machine can also identify bacteria in processed meats) use the dieocrillsalator. Getting the most return on this sizable investment by sharing across industries is called: a. cost of input factors b. economies of scale c. economies of scope d. learning-curve effects e. experience-curve effects
c. economies of scope
The fact that Southwest Airlines only flies one type of plane helps make it one of the most efficient airlines in the industry. This approach maximizes the number of repetitions crews get with the ground and airborne processes involved in flying and turning around the single airframe and reach scale economies in the use of personnel and equipment. As such, SWA has reached competitive advantage through ________________. a. cost of input factors b. economies of scale c. economies of scope d. learning-curve effects e. experience-curve effects
c. economies of scope
The aspect that makes cost leadership superior to price leadership as a source of sustainable competitive advantage is: a. rarity b. value c. inimitability d. value innovation e. differentiation
c. inimitability
With careful analysis, Tanner, Inc. discovered that their cost per unit on tennis balls decreased at a consistent rate until production hit 50,000 balls. Those same costs began to increase after production hit 500,000 tennis balls. The range between 50,000 and 500,000 tennis balls would best be described as: a. the experience curve b. the learning curve c. minimum efficient scale d. economies of scale e. economies of scope
c. minimum efficient scale
For many years, U.S.electronics manufacturers had a difficult time competing in European markets because of their inability or unwillingness to create products that worked on 220 volt European standard instead of the American 120V standard. America's decision to adopt a voltage standard different from Europe created a ___________ that made American companies less competitive in European markets. a. value chain b. barrier to entry c. path dependence d. resource flow e. resource stock
c. path dependence
IBM devoted a great deal of time and money trying to keep its struggling mainframe business alive. At the same time, IBM's competitors shifted their resources to the emerging personal computer industry. As a result, IBM made very little money while the Dells and Apples of the world made billions. In this scenario, IBM's opportunity costs are represented by: a. The time and money IBM spent on mainframes. b. The billions made by Dell, Apple, and others. c. The billions IBM could have made had it invested more heavily in PC's. d. The 'very little' money IBM made executing its mainframe strategy. e. The time and money spent by IBM's competitors on growing the PC industry.
c. the billions IBM could have made had it invested more heavily in PC's.
The balanced scorecard is only effective if top managers are adept at: a. turning vision into mission b. turning mission into vision c. turning strategy into objectives d. turning objectives into strategy e. turning strategic intent into vision
c. turning strategy into objectives
Differentiators find competitive advantage primarily by manipulating _________________________ in the economic value creation model. a. consumer surplus b. producer surplus c. value d. cost e. opportunity costs
c. value
Of all the variables in the Economic Value Creation approach to determining competitive advantage, ______________ is the most difficult to objectively measure. a. cost b. price c. value d. economic value created e. producer surplus
c.. value
To use the ______________ approach to measuring competitive advantage, top management has to be concerned with (among other things) how shareholders view their company. a. Economic value creation b. Accounting profitability c. Shareholder value creation d. Balanced scorecard e. Triple-bottom line
d. Balanced Scorecard
Apple spends millions of dollars per year recruiting and training the best, most creative computer engineers in order to replenish and strengthen its critical R&D department. These millions represent ___________ used to maintain and grow its _______________. a. resource stocks, resource flows b. strengths, competencies c. dynamic capabilities, resource stocks d. resource flows, dynamic capabilities e. resource flows, resource stocks
d. Resource flows, Dynamic Capabilities
The billions of dollars lost by the owners of its equity shares when Enron filed for bankruptcy is best defined as: a. pensions b. return on assets c. intangible assets d. risk capital e. tangible assets
d. Risk Capital
In trying to stake out a competitive position in the marketplace, Michael Porter suggests ______________ and __________________ as the two strategies by which a competitive advantage can be won. a. competitive positioning and competitive scope b. competitive scope and competitive scale c. differentiation and price leadership d. cost leadership and differentiation e. price leadership and cost leadership
d. cost leadership and differentiation
The primary protection against the threat of substitutes offered by the differentiation strategy is: a. lower price b. economies of scale c. erosion of margins d. differential appeal e. it offers no protection
d. differential apeal
Rolls Royce makes a car that is considered by many to be the height of luxury. Its $400K price tag suggests that the company is using a ____________________ competitive strategy. a. first mover b. broad differentiation c. broad cost leadership d. focused differentiation e. focused cost leadership
d. focused differentiation
The main job of the advertising manager is to maximize ___________. a. producer surplus b. consumer surplus c. price d. value e. economic value created
d. value
As a consumer, if the ____________ you attach to a good or service is greater than its __________, you are likely to purchase it. a. cost, price b. price, value c. price, cost d. value, price e. value, cost
d. value, price
Stakeholder theory is most closely associated with: a. Accounting profitability b. Balanced scorecard c. Shareholder value creation d. Economic value creation e. Triple bottom line
e. Triple bottom line
JetBlue's decision to replace its cloth seats with leather appeared on the surface to be a welcomed new perk for customers. While that was true, it also represented a cost cutting opportunity for the airline since the leather seats lasted much longer and were easier/quicker to clean. As such, the decision represents a _____________ on JetBlue's part. a. differentiator b. complementor c. core competency d. scope economy e. value innovation
e. value innovation
