Strategic Mgt Final

Answering the balanced scorecard question of "how do we create value?" challenges managers to develop strategic objectives that ensure future ______. (Check all that apply.)

innovation competitiveness organizational learning

Exit barriers, strategic commitments, and competitive industry structure are important factors in determining the _____________.

intensity of rivalry

Which are examples of activities that create value? (Check all that apply.)

invoicing a customer taking an order from a customer making a physical delivery of a product

An example of a recent innovation in process technology is ______.

lean manufacturing

Managers have ______ direct influence over external forces in the firm's general environment than those in the firm's task environment.

less

Managers have ______ resources in their quest for competitive advantage.

limited

The threat of entry is high when capital requirements are ________ in comparison to the expected returns.

low

In a focused cost-leadership strategy, a firm provides ______.

low-cost products to a niche market

Which of the following are offered by a balanced scorecard?

measures of internal processes common financial metrics operational measures on customer satisfaction

The positive effect that one user of a product or service has on the value of that product or service for other users is known as the ___.

network effect

The online auction site eBay has more than 100 million active users, so buyers are more likely to find what they are looking for while sellers are more likely to find buyers for the items they are offering. This is an example of __.

network effects

In order to influence changes in their political environment, firms pursue ______.

nonmarket strategies

In the ______ step of the strategy implementation phase of the AFI strategy framework, managers would examine how the firm should be structured in order to implement the desired strategy.

organizational design

Marketing, sales, and distribution are ______ activities in a firm's value chain.

primary

Competitive advantage is gained in the value chain through which of the following types of activities? (Check all that apply.)

primary support

Managers implement the blueprint of their business model through which of the following? (Check all that apply.)

processes culture structures

If a firm has a successful ______ strategy, its product will have a higher perceived value and the firm will have a competitive advantage over a competitor that creates a product at equal cost but with a lower reservation price.

product differentiation

Strategic positioning allows managers to ______.

provide customers value while controlling costs

When a company offers video-game consoles at a steep discount, but charges customers high fees for games, they are operating on a ______ business model.

razor—razor-blade

Which of the following situations would justify the use of manufacturing robots by a producer of packaged foods?

an increase in demand from the market

The most rigorous means of analyzing the profit potential within a specific industry is to conduct ______.

an industry analysis

Walmart producing private-label brands, such as Equate health and beauty items and Parent's choice baby products, is an example of ______.

backward integration

When a buyer moves upstream in the industry value chain, into the suppliers' business, ______ occurs.

backward integration

Companies are required to provide ______ to shareholders, which are used in determining a firm's competitive advantage.

benchmarks

A firm uses the ______ business model when it sells a set of products that have different levels of demand for a price less than their total combined prices.

bundling

Why does the learning curve go down when productivity is considered?

As workers repeatedly engage in an activity, they become more efficient, driving down costs.

Which of the following are considered resources under the resource-based view of the firm? (Check all that apply.)

Capabilities Competencies Assets

In terms of productivity, which of the following is true of learning curves?

They go down.

In contrast to primary activities, support activities add value ______, but are necessary to sustain primary activities.

indirectly

An industry analysis provides which of the following?

-Insight into a firm's strategic position within an industry -A rigorous way of identifying the industry's profit potential -The level of profitability that can be expected for the average firm in the industry

Michael Porter developed the five forces model to help firms do which of the following? (Check all that apply.)

-determine the profit potential of different industries -gain and sustain a competitive advantage

According to the five forces model, a firm seeking to compete in an established industry should seek to do which of the following? (Check all that apply.)

-position itself in a way that relaxes the constraints of strong forces -position itself in a way that leverages weak forces

Which of the following topics should be considered during the analysis phase of the AFI framework?

-the firm's business model and competitive advantages -the external environment and associated challenges -the role of strategic leadership and the strategy process -the firm's internal strengths and resources

What is one of the benefits of pursuing a differentiation strategy when it comes to the power of suppliers?

Differentiation provides protection against an increase in input prices.

A company's total return to shareholders consists of which of the following? (Check all that apply.)

Dividends received Stock price appreciation

Which of the following are important factors in determining the intensity of rivalry among existing competitors?

Exit barriers Industry growth Competitive industry structure

Which statements about creating and implementing an effective business model are true?

Firms must transform their competitive strategy into a blueprint of initiatives and actions that support their goals. Firms must implement their competitive strategy blueprint through processes, procedures, culture, and structure

Which of the following are the key questions for understanding the balanced scorecard? (Check all that apply.)

How do we create value? What core competencies do we need? How do shareholders view us? How do customers view us?

When a new firm enters an industry, which of the following often occur? (Check all that apply.)

Incumbent firms lower prices. Industry profit potential declines. Incumbent firms spend more to satisfy customers.

In addition to the static nature of the PESTEL, Porter's five forces, and strategic group mapping frameworks, what is their other shortcoming?

It does not help us understand why there are performance differences among firms in the same strategic group.

Which of the following are considered disadvantages of the shareholder value creation approach? (Check all that apply.)

Overall macroeconomic factors have a direct bearing on stock prices. Stock prices are influenced by the psychological mood of investors. Stock prices can be highly volatile.

Which of the following competitive forces can result in the erosion of margins for both differentiation and cost-leadership business strategies?

Power of suppliers Threat of entry Power of buyers

Which capability is required to create superior product features?

R&D

Identify the framework that allows managers to synthesize insights obtained from internal and external analysis.

SWOT analysis

One of the most popular tools used by firms to evaluate their current situation and future prospects is the ______.

SWOT analysis

Which of the following are examples of economies of scale? (Check all that apply.)

Spreading fixed costs over more units Having more negotiating power vis-à-vis suppliers

Why is competitive advantage more likely to spring from intangible rather than tangible assets?

Tangible assets can be bought on the open market.

The Bright Bulb light bulb company produces a line of LED bulbs that customers consider very similar to competitors' LED bulbs. Which of the following conditions must be true for Bright Bulb to have a competitive advantage?

The bulbs must have a lower cost than competitors' bulbs.

Baby Buggy Baby sells high-end baby strollers. In an attempt to maintain its competitive advantage, the firm began adding additional features to its strollers. Customers liked these features and sales increased, but the company's profit margins shrank. Which of the following is the likely reason for this?

The firm neglected to control costs.

Which of the following statements is true about a firm's stock price?

The price determines in part the stock's market valuation.

Which of the following are situations in which a resource is considered valuable? (Check all that apply.)

The resource helps the firm increase its economic value creation (V-C). The resource helps a firm exploit an external opportunity.

Which of the following statements regarding tasks in the AFI strategy framework is true?

The tasks are very interdependent.

Which statement about the five forces that shape competition is true?

Their strengths are context-dependent.

Which of the following statements are true about the capabilities of a firm? (Check all that apply.)

They concern the deployment of resources. They include managerial skills. They include organizational skills.

The ______ is a theoretical model that explains and predicts what resource attributes underpin competitive advantage. It identifies which types of resources are key to firm performance.

VRIO framework

Which of the following identifies the resources that can lead to a competitive advantage?

VRIO framework

Capabilities include which of the following? (Check all that apply.)

a company's organizational structure a company's culture a company's routines

According to the efficient-market hypothesis, information about which of the following is embedded in a stock price? (Check all that apply.)

a firm's past expectations of the firm's future performance a firm's current state

When competitive advantage is assessed from an analysis of publicly available data, a firm measures its _____.

accounting profitability

According to the dynamic capabilities perspective, competitive advantage stems from a firm's ability to ______.

agilely transform its resource base

Netflix had a successful business model based on a large library of streaming content but then achieved even more success by also producing and distributing original content. This is an example of the potential value of ______.

business model innovation

The power of ______ is the pressure they can put on the margins of producers in the industry by demanding a lower price or higher product quality.

buyers

Which of the following are ways in which the power of buyers affects producers?

by obtaining price discounts by requesting more service by demanding higher quality

When a firm goes bankrupt, shareholders ___.

cannot recover their risk capital

The organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically are called _____.

capabilities

What are competitors engaged in when they work together to achieve a strategic objective?

co-opetition

Public companies are required by law to release detailed accounting data, which enables ______.

comparative analysis of firms

A(n) ______ occurs when a firm performs below the industry average or is outperformed by its competitors.

competitive disadvantage

Bundling of products and services that are consumed in tandem to create value is an example of ______.

complements

A firm that pursues a differentiation strategy will often find that the added expense of offering new or unique product features offsets the increase in perceived value, and profit margins begin to erode. This underscores the importance of ________ control for firms pursuing a differentiation strategy.

cost

Which of the following determine a firm's competitive advantage? (Check all that apply.)

cost position relative to competitors value position relative to competitors

A firm's dynamic capabilities allow it to respond agilely to market changes, as well as to ______.

create market changes

A firm that successfully executes a strategy benefits society by ______. (Check all that apply.)

creating value reinvesting profits and increasing employment

Which of the following are examples of business activities? (Check all that apply.)

delivery of products invoicing customers order taking

A good strategy consists of three elements. The first element is accomplished through analysis of the firm's external and internal environments. We also call this _____.

diagnosis of competitive advantage

A firm trying to compete with the leading firm in a competitive industry can try to negate the leading firm's competitive advantage through which of the following? (Check all that apply.)

direct imitation substitution

What tactic did Amazon use when entering the book selling space and introducing the Kindle?

disruption

It might be a good idea to expand or upgrade a firm's human capital base during a ______, because unemployment is high and therefore human capital is abundant and wages usually _____.

downturn; fall

For a firm to sustain any competitive advantage over time, the fit between its internal strengths and external environment needs to be ______.

dynamic

Growth rates, interest rates, and levels of employment would be considered ______ factors in a firm's general environment.

economic

Everybody can use the basic version of Dropbox for free, but needs to pay for premium services. Dropbox operates on a ______ business model.

freemium

The pay-as-you-go model is ______.

gaining momentum

The weaker the five forces in Porter's model, the _______ the industry's profit potential.

greater

When suppliers do not depend heavily on the industry for a large portion of their revenues, the power of suppliers is ______.

high

When there are a few buyers and each buyer purchases large quantities relative to the size of a single seller, the power of buyers is ______.

high

The balanced scorecard framework enables managers to do which of the following?

implement feedback and organizational learning communicate and link the strategic vision translate the strategic vision into operational goals

A balanced scorecard is a tool for strategy ______.

implementation

Products in the affordable "business-casual" clothing market have largely become commoditized, and most retailers have begun to compete mainly on price rather than product features. In this environment, it is impossible for one retailer to gain market share without another losing it. This is an example of a ______ ocean.

red

While the ______ clarifies a firm's core competencies, the ______ helps leaders understand how competitive advantage arises from the firm's unique activities.

resource-based view; value chain perspective

From the view of a shareholder, the measure of competitive advantage that matters most is return on _____.

risk capital

Which of the following are examples of commonly encountered capital requirements? (Check all that apply.)

setting up production facilities paying for start-up losses managing a production process

Which of the following help determine competitive industry structure? (Check all that apply.)

size and number of competitors firms' degree of pricing power height of entry barriers

Andrew's Home Center has created a unique situation for itself in its industry that allows the company to not only provide excellent value to its customers but also control its costs. This is known as ______.

strategic positioning

There is a(n) ______ relationship between competitive intensity and the power of the five forces.

strong

In order to avoid making costly mistakes due to the potential shortcomings of the SWOT analysis, a manager should ______.

take results from the SWOT analysis with "a grain of salt"

Managers are able to influence which of the following types of external forces? (Check all that apply.)

the structure of their industry strategic group composition

Investors in a company are mostly concerned about the company's ______.

total return to shareholders

Managers often have to make decisions between two conflicting strategic options, otherwise known as ______.

trade offs

Which of the following conditions lead to a strong threat of substitutes? (Check all that apply.)

when the cost of switching to the substitute is low when the price-performance trade-off is attractive

To formulate an appropriate business-level strategy, managers must answer the ______ questions of competition.

who, what, why, and how