WPC 480 All Quiz

Which of the following statements is true of the social responsibilities of a business?

A firm's ethical responsibilities go beyond its legal responsibilities. A firm's ethical responsibilities go beyond its legal responsibilities. They embody the full scope of expectations, norms, and values of its stakeholders. Managers are called upon to do what society deems just and fair.

Several senior managers recently left Bass Automobile Inc. and went to work at Unicorn Autos Inc., a rival company. What does this imply?

Bass Automobiles Inc. faced resource leakage. Resource leakage might occur through employee turnover, especially if key employees leave. Significant resource leakage can erode a firm's competitive advantage.

Which of the following factors most contributes to the U.S. automotive industry being characterized by high entry barriers?

Car manufacturers require large-scale production in order to be cost-competitive. Even with relatively recent competitors like Tesla in the marketplace, the U.S. automotive industry is characterized by high entry barriers. Car manufacturers require large-scale production in order to be cost-competitive.

Fran owns Consolidated Auto Parts, a company that got its start making auto parts related for hybrid vehicles, but her firm has had difficulty establishing itself as a maker of parts for the more-profitable internal combustion engine. What is most likely contributing to Consolidated's problem in this area?

Entry barriers usually protect the incumbent players in a profitable industry. One of the challenges that strategic leaders face is that often the most attractive industries in terms of profitability are also the hardest to break into because they are protected by entry barriers.

You are the manager in charge of setting the strategy for a new frozen yogurt company. Which of the following questions would be appropriate for you to ask during the analysis phase of the AFI strategy framework?

How have consumer preferences in frozen yogurt flavors changed in the last five years?

How is a firm's task environment different from its general environment?

Managers have some influence over external factors in the task environment; they have little direct effect over external forces in the general environment. Managers have some influence over external factors in the task environment; they have little direct effect over external forces in the general environment.

Toy sales have declined by 10 percent each year, forcing many retailers to exit the industry. To eliminate its remaining competition, Bleaker Toys sells all of its product at a loss and relies on its significant cash holdings to cover costs until its competition is forced to exit the industry. Is this an example of a successful strategy? Why or why not?

No. Bleaker's strategy and competitive advantage are unsustainable. Strategy is not a zero-sum game. Competition focuses on creating value for customers rather than destroying rivals. Although Bleaker Toys has created temporary value for its customers by offering its goods below cost, the advantage it achieved is unsustainable. When Bleaker runs out of cash to cover its operating expenses, it will no longer be able to offer its toys at such a low cost and will either be forced to raise prices or exit the industry.

________ are best described as the ethical standards and norms that govern the behavior of individuals within a firm.

Organizational core values Organizational core values are the ethical standards and norms that govern the behavior of individuals within a firm or organization.

After conducting a SWOT analysis, your firm has decided to focus on addressing issues located in the Weaknesses-Opportunities quadrant. Which of the following steps are you most likely to take?

Reorganize the inefficient research and development department to bring innovative products to market more quickly. The lack of research and development productivity is an internal weakness that prevents your firm from taking advantage of external opportunities by being the first to offering new products and services. By addressing the lack of productivity with a departmental reorganization, the firm has produced a strategic alternative based on the weaknesses-opportunities quadrant of the SWOT matrix.

The "diagonal assembly system" was a production system pioneered by the automobile company Gogo. Recently, Gogo was able to sue a competitor and won the suit, thereby receiving $100 million in damages. Which of the following would most likely enable Gogo to win such a lawsuit?

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

Which of the following statements about product-oriented visions is true?

They tend to force managers to take a myopic view of the competitive landscape. A product-oriented vision defines a business in terms of a good or service provided. Product-oriented visions tend to force managers to take a myopic view of the competitive landscape.

Keen Beans, a leading coffee roaster, anticipated that the prices of coffee beans from Costa Rica, where its main suppliers were located, would double in less than three years. This would significantly affect Keen Beans' profit margins. Thus, Keen Beans decided to develop a new partnership with a supplier in Indonesia. As predicted, the price of Costa Rican coffee beans increased twofold. Because the price of Indonesian coffee beans was much lower, Keen Beans was able to maintain its profit margins in turbulent times. Which of the following isolating mechanisms does this scenario best illustrate?

better expectations of future resource value The scenario illustrates better expectations of future resource value. Sometimes firms can acquire resources at a low cost, which lays the foundation for a competitive advantage later when expectations about the future of the resource turn out to be more accurate.

Pear Tree Electronics is a large conglomerate that operates in 17 different countries. The corporate executives at the headquarters have decided that the company's objective for the next two years will be to increase its customer equity, or the value of potential future revenues generated by all its customers in a lifetime. Based on this guideline received from the top management team, the product leader of the home audio division has decided to adopt a cost-leadership strategy in all his 17 units. Thus, the decision made by the product leader best illustrates a ________ strategy.

business The given decision made by the product leader best illustrates a business strategy. General managers in strategic business units must answer business strategy questions relating to how to compete in order to achieve superior performance. Within the guidelines received from corporate headquarters, they formulate an appropriate generic business strategy (cost-leadership, differentiation, or integration) in their quest for competitive advantage.

Due to political instability in the country of East Gerdon, the strategic leaders at the headquarters of Mako Manufacturing have decided to close all production facilities in the country until stability returns. Mako's managers have formulated a ________-level strategy.

corporate Corporate executives at headquarters formulate corporate strategy. They need to formulate a strategy that can create synergies across business units that may be quite different, and determine the boundaries of the firm by deciding whether to enter certain industries and markets and whether to sell certain divisions.

Facing stiff competition in the e-reader market, Sumac Industries wants to protect its competitive advantage by increasing the perceived value of its reader. Sumac's best strategy to accomplish this would be to

highlight the number of celebrities who use Sumac e-readers. A valuable product enables a firm to improve its profit margin by increasing sales without raising production costs. By touting the use of Sumac e-readers by celebrities, Sumac can differentiate itself from competitors and improve its perceived value, leading to higher sales. Adding expensive new features or lowering the retail price, on the other hand, will erode Sumac's profit margins, while imitating competitors will make it difficult for Sumac to differentiate itself.

Eleanor owns a large portion of Apex Apparel's stock. However, she is not employed by the company. In this scenario, Rachel is the company's

internal stakeholder In this scenario, Eleanor is the company's internal stakeholder. Internal stakeholders of a firm include stockholders, employees (including executives, managers, and workers), and board members.

Which of the following is a macroeconomic factor that can affect a firm's strategy?

levels of employment Levels of employment are a macroeconomic factor that can affect a firm's strategy. In boom times, unemployment tends to be low, and skilled human capital becomes scarce and more expensive. In economic downturns unemployment rises. As more people search for employment, skilled human capital is more abundant and wages usually fall.

Magical Productions is a large production company that controls a major portion of the television 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, Magical Productions is most likely functioning in a(n) ________ industry.

oligopolistic In this scenario, Magical Productions is most likely functioning in an oligopolistic industry. An oligopolistic industry is consolidated with few (large) firms, differentiated products, high barriers to entry, and some degree of pricing power.

As the CEO of a conglomerate, Eva Morris exhibited her strong commitment toward the company's core value that customers' well-being is more important than profit when she convinced the board of directors to liquidate the company's pesticide subsidiary. The pesticide brand sold by her company was a major revenue earner in lesser-developed nations, but studies indicate that it is a carcinogen. Eva persuaded the board that the company had to be responsible toward society. In this scenario, Eva has demonstrated

strategic leadership. In this scenario, Eva has demonstrated strategic leadership. Strategic leadership pertains to executives' use of power and influence to direct the activities of others when pursuing an organization's goals.

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 lower than its competitors because of minimal investments in operation and administration. In this scenario, FindFor Inc. has most likely been able to provide superior value and cost control through

strategic positioning.