WPC 480: M1-M13

The metaphor used for competitive advantage is a castle's moat. The metaphorical managerial imperative is to have the moat both deep and wide. What is the most sustainable way listed below to achieve a deep and wide moat?

A company's patents

The difference between strategic decisions and tactical decisions is one of degree. The characteristics that differentiate between a strategic decision and a tactical decision is based on which of the following.

Amount of available resources consumed by the decision, Ability to reverse the decision and Temporal implication consequences of the decision

China has been a powerhouse of growth in GDP since the year 2000. It has also has been a major U.S. trading partner. This has resulted in what situation for the U.S.?

An uninterrupted negative net trade balance over the period from 2020

As companies grow, the build taller structures but do not widen their span of control. Is this statement true or false?

False

Broadly speaking it can be said that large and well-known publicly-listed U.S. companies have typically not suffered impairment charges since these companies are professionally managed and have had the band-width and deep pockets to conduct deep due diligence and so establish acquisition prices that do not "over pay".

False

For competency to be regarded as a distinctive competency it must be unique. Is this statement true or false?

False

Transparency International conducts an annual survey of 13 major data sources (like the World Bank, African Development Bank and The Economist Intelligence Unit) to establish its Corruption Perceptions index. By and large, this survey shows that only very few countries are seen have problems with corruption at institutional level. Is this statement true or false?

False

The Balanced Scorecard (BSC) has four components - Financial, Customer, Process and Innovation (Learning). Two of these components lend themselves to the application of 'hard' measurement performance measurement criteria. Which two of the four BSC components typically involve 'hard' performance measures?

Financial and Process

Michael Porter has developed five generic market strategies. Which of the below descriptors are those that represent Porter's generic strategy 2x2 matrix?

Competitive Scope and Competitive Advantage

A competitive market strategy based on integration requires differentiation and low cost. These reason this is difficult to achieve is best described by which one of the following explanations?

Differentiation and cost leadership are distinctly different strategies that require often contradictory choices

Strategy and operations each have a different "doing' focus. Operational excellence combines the two foci. What is the most appropriate definition for operational excellence from those identified below?

Doing the right things right

Creating the situation for the best probability for acquisition success (measured as a return on invested capital) is when which condition below is met? Is this when the company to be acquired meet the following criterion?

It can be acquired at a sensible price

There are a number of basic accounting financial performance measures that a company analyst will focus on. One important measure for analysts is EBITDA. Which one of the following is the main reason for this?

It is the measure that is closest to cash

Strategic alliances can take many forms and can be represented on a continuum that is anchored by spot market transactions at one end to greater than 51% to 100% acquisitions at the other. Within this continuum there is a fundamental distinction between two classes of alliances. The two classes of alliance are distinguished by whether they are what?

Equity vs. non-equity based

Clayton Christen from Harvard has developed a conceptualization of innovation he has called disruptive innovation. This type of innovation is based on the idea of what combination of markets and technologies?

Existing markets & new technologies

Forward integration is which of the following?

Moving closer to the ultimate consumer

There are three ways in which companies grow. This is through one or more of three growth avenues. Which of the below are these three avenues?

Through organic growth, Through alliances and Through M&A

Innovation can be defined as problem solving. Is this statement true or false?

True

A differentiation strategy is based on being what?

Unique

U.S. Personal Consumption Expenditure as a percentage of Global GDP was approximately what percentage in 2019?

16%

For a resource or competency/capability to give rise to a sustainable competitive advantage it has to achieve what outcome?

Last long enough that competitors stop attempting to duplicate the resource or competency/capability that has given rise to the competitive advantage

There are three primary ways in which companies represent themselves to their clients/customers and what they are known for; operational excellence, product leadership and customer intimacy. Identify the three client/customer perspectives that would describe a "customer intimate" perception.

"They're very responsive", "Their services are unique" and "Exactly what I need"

U.S. Global Domestic Product (GDP) as a percentage of Global GDP was approximately what percentage in 2019?

25%

Similar to Transparency International, the Organization for Economic Co-operation & Development (OECD) has developed a concord called the Anti-Bribery Convention which has 41 signatories. This Convention is focused on the export of corruption, mainly by bribery. The signatories to the convention control about what percentage of world exports and what percent of Foreign Direct Investment (FDI) outflows, respectively?

67% and 90%

The fundamentals of a cost leadership strategy are based on one or more of three of the following actions. Which are these three?

Achieving economies of scale, Exercising (one's own) buyer power and Positively managing to achieve experience curve cost per unit of production outcomes

Companies have acquired other companies in order to vertically integrate. In the case of the Foxconn Technology Group (owned by Hon Hai Precision Industry Co., Ltd, Taiwan), it has taken a substantial (66%) equity position in Sharp Corporation (Japan). Sharp produces branded appliances and electronics as well as electronic components such as OLED displays for iPhones. Foxxcon is well known as the assembler of Apple's iPhone models. What is taking this equity position an example of?

Balanced integration

The two largest trading partner countries for the U.S. in 2019 were which countries of those listed below?

Canada and Mexico

There are (at least) five different corporate governance models around the world. For the socially responsible governance model, which of the below represents that governance model's decision-making?

Consensus decision-making

Porter's five forces consist of five elements - Threat of New Entrants, Bargaining Power of Customers/Buyers, Bargaining Power of Suppliers, Threat of Substitutes and Rivalry Among Existing Firms. Which of these five is the most important for understanding the effect on firm profitability?

Could be any of five elements since it depends on the industry dynamics at any point in time

The purpose of any organization is to do which one of the following?

Create value for its stakeholders

The Herfindahl-Hirschman Index is used by various government department to judge whether an acquisition or merger proposal is material is reducing competition. Which of the below are the departments that can review merger or acquisition proposals?

Department of Justice & Federal Trade Commission

The Foreign Corrupt Practices Act (FCPA) covers two aspects of company activities when such companies or individuals have a certain degree of connection to the United States? Two Departments oversee company and individual activities under the auspices of the FCPA. Which two are these?

Department of Justice & Securities Exchange Commission

A distinctive competency is a well-performed internal capability that is central, not peripheral, to a company's strategy, competitiveness and profitability. Is this statement true or false?

False

Alliance formation is a complex activity. Compared to M&A, most of the time spent in alliance formation is spent in matters such as alliance structuring, representations and warranties and indemnification. Is this statement true or false?

False

Competitor analysis needs to be focused on the here and now. Is this statement true or false?

False

Joseph Schumpeter developed the concept a conceptualization of creative destruction. This is the "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one." This occurs when innovation deconstructs long-standing arrangements and frees resources to be deployed elsewhere." This process, while important for the macroeconomy, has not seen much turnover (almost none) in the S&P 500. Is this statement true or false?

False

Mechanistic structures are typified by wide spans of control, decentralization, low specialization and formalization and loose departmentalization. Is this statement true or false?

False

PESTEL analysis is a useful tool for grouping the various influences coming from an organization's external environment. The acronym PESTEL refers to the Political, Ecological, Social, Technological, Environmental and Legal environments. It this last statement true or false?

False

The BSG market share / growth matrix is a cash management portfolio concept where cash cow businesses (business units) fund star businesses in order that they become the cash cows of the future. Is this statement true or false?

False

The most simple way in which to craft a Vision Statement and a Mission Statement are to use which words?

For a Vision Statement the words "to be" and for a Mission Statement the word "by"

A number of publicly-listed companies have split themselves into two publicly-listed companies. What is the predominant rationale for doing this?

Greater share owner value is created by providing for ownership in both publicly-listed companies rather than just in the original company

Archetypical globalization strategies have been defined according two dimensions - need for local responsiveness and need for global integration. Which of the below describes a multi-domestic strategy?

High need for local responsiveness & low need for global integration

Organizational performance metrics can be categorized according whether the measures are leading, current or lag measures. Financial performance measures (which we all use) are represented by which one of the following temporal characterizations?

Lag performance measures

A blue ocean strategy is based on the dual objectives of differentiation and cost leadership. In order that a company is successful with this strategic intent, a company must do which three of the following:

Make the competition irrelevant, Break the relative benefit/relative cost trade-off for the product or service and Create and capture new demand

Related diversification is defined by which description below?

New geographies and new products but where there is a connection to the existing geographies and existing products

Stakeholder management is an art. The most successful approach to optimizing value for all stakeholders comes through which one of the following approaches?

Partnering

There are several stakeholder analysis frameworks. One of these, the salience stakeholder analysis model, is based on three attributes. Which of the below are the three salience model attributes?

Power, Legitimacy and Urgency

There are many reasons why individuals become entrepreneurs. Which among the following the most often cited reason for becoming an entrepreneur in a recent study?

Prefer to be my own boss

The three elements of the Fraud Triangle are based on which of the three below:

Pressure, Rationalization and Opportunity

The management reporting model for any organization can be identified by the cascade sequence of three parameters. Which of the parameters below are these three parameters?

Product, Customer and Geography

Strategic planning methodologies have evolved from the traditional sequential planning process that assumed a stable and benign environment to those that are more adaptive to turbulent planning environments. Which two of the following are among these more recent strategic planning methodologies that are more appropriate for today's turbulent business operating environment?

Scenario planning and Future backwards planning

The DuPont performance model structure is based on five ratios and four financial inputs - two from the income statement and two from the balance sheet. The two financial inputs from the balance sheet are which two from the following list:

Shareholders' Equity and Total Assets

The basic assumption of "Tone-at-the-Top" as a leadership concept is best represented by which one of the following statements?

That it represents the ethical atmosphere created in the workplace by leadership

Strategic group mapping is based on two central ideas. Which of the below best describe these two central ideas?

The paired evaluative dimensions chosen to finally represent strategic groups should be those that differentiate between the strategic groups the most and The characteristics of the strategic groups demonstrate lesser within strategic group variance than those that exist between strategic groups

When goodwill is added to a company's balance sheet it represents what in terms of an acquisition?

The present value of future free cash flow expectations arising from an acquisition's synergistic benefits

The purpose of strategy in business is to do what?

To create and provide the business with sustainable competitive advantage

Completing a VRIO analysis requires (1) identifying resources, capabilities and competencies regarded to be key to creating sustainable competitive advantage, (2) assessing which of the VRIO 'sustainability' questions the resource, competency or capability can respond 'yes' to and (3) grouping the 'sustainability' response bundles to which a 'yes' assessment has been given in order to identify those resources, competencies or capabilities that are core to the organization being able to sustain its competitive advantage. Is this statement true or false?

True

Most acquisitions are disappointing or outright failures, largely because acquirers overpay. One of the main reasons put forward for this is that for many CEOs incentive compensation is tied to firm size - sales revenue, total assets and number of employees. Is this statement true or false or other?

True

Knowing the nature of the value a firm creates, and the nature of the value being created by the firm's clients for their clients' or customers' is a fundamental basis for developing client engagement strategies and relationships. The three "value typologies" are value chain, value shop and value network. What is the match between the value typology description - creates solutions to individual problems or exploits market opportunities?

Value Shop

The three main airline alliances - oneworld, Star Alliance and Skyteam - represent co-operation arrangements between alliance member airlines in terms of code sharing, lounge access, aircraft maintenance and so on. This alliance is best described as what kind of alliance?

Vertical

In order to understand the true nature of the need or problem we are addressing as a business the first question we need to answer is which one of the following:

What Business are we (really) in?

In VRIO analysis, for a competitive advantage to be sustainable, is it necessary that all the VRIO analysis conditions be met - that is, that a resource is Valuable, Rare, Inimitable and that the company is Organized to exploit it?

Yes, absolutely

The Herfindahl-Hirschman Index (HHI) is a commonly accepted measure of market concentration. In a highly concentrated market, if a proposed merger were to increase the HHI by 325 points (out of 10,000), would this raise anti-trust concerns?

Yes, definitely