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Which of the following summarizes the difference between a firm's vision and mission?

A vision states what a firm wants to accomplish; a mission states how a firm plans to accomplish this vision.

Which of the following statements is true of accounting data?

Accounting data are historical data and thus backward-looking

The balance-scorecard can accommodate

Both short and long term performance metrics

Organizational and managerial skills that find their expression in a company's structure, routines, and culture are referred as

Capabilities

Which of the following factors best 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.

A firm that achieves superior performance relative to other firms in the same industry or the industry average has an?

Competitive advantage

The Scoop, Ltd is a magazine publishing company whose average return on invested capital is approximately 5 percent. Because magazine publishing is a declining industry, the industry average has been negative(-5 percent) for the last few years. In this scenario, the Scoop Ltd has a

Competitive advantage

A firm incurs $400 to manufacture a television. In the market, customers are willing to pay a maximum of $600 for the television priced at $500. The difference of $200(600 minus 400) us the

Economic Value created

High demand for online video streaming options is one of Netflix's core competencies

False

The autocratic strategic management process exhibited by the former head of Apple, Steve Jobs, is best described as an emergent strategy.

False

Fun Robotics produces components used in electronic toys. In fiscal year 2017. Fun Robotics earned an accounting profit of $3 million. However, Fun Robotics' production facilities might have also been used to produce components for mobile phones, which would have generated $2 million in revenues and saved the company $500,000 in production costs. Which of the following statements is true

Fun Robotics earned an economic profit of $500,000

After carefully assessing the market potential for hybrid motorcycles, it was decided at the corporate headquarters of HyCycles Inc. that the company would be launching a hybrid version of all its motorcycle models within the next two years. This would mean that each strategic business unit under the company would be involving in its own research and development efforts. Which of the following strategies in the planned emergence model does this best illustrate?

Intended Strategy

Invoro is a market leader in consumer electronics. If Finolo and Ethver, companies that manufacture televisions, develop the same customer knowledge base and create products with the same customer appeal as Invoro, then

Invoro will have a resource that is valuable but no longer rare.

The average cost of production for a bottle of vitamin water in the industry is $4 while its average price is $7. StoreAll Inc. manufactures the same product for $3 per bottle and sells it for $7 per bottle. Which of the following statements is most likely true of StoreAll inc in this scenario?

It has a competitive advantage in the industry

Which of the Following is a primary feature of the five forces model?

It views competition within an industry broadly to include forces such as buyers, suppliers, and the threat of substitues.

The executives at Red Couture Inc. are developing strategic plans to address plausible future situations like rise in the prices of cotton and synthetic fabrics by 20 percent, appreciation in the value of the dollar, increase in the cost of labor by 30 percent, and the increase in demand for the company's products. By doing so, the company will be well prepared with its planned responses if any of these situations occurs in the future. Thus, Red Couture is employing _____ as the approach to the development of strategy.

Scenario Planning

In Strategy Highlight 2.2, what type of strategy did Diana, the Starbucks store manager in southern California, use to develop the new iced beverage for her store?

She used an emergent strategy

A traditional top down strategic planning process typically begins with

Strategic leaders adjusting a company's vision and mission based on environmental analysis.

A high percentage of R&D/Revenue ratio indicates a

Strong focus on innovation to improve current products and services

Which of the following is likely to happen due to horizontal mergers between competitors such as Delta and Northwest airlines?

The overall industry profitability will increase

Top-down strategic planning as an approach to the strategic management process will be the most effective when the

The size of the firm is large

Earlier the travel industry was controlled by a few large travel companies that booked holidays, air tickets, bus tickets and hotels for the customers. However with the emergence of the internet, smaller travel agencies started mushrooming in the industry and customers started making their own reservations. Which of the following can be inferred from the information?

The travel industry changed from a consolidated structure to a fragmented one.

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

They tend to force managers to take a myopic view of the landscape.

Which of the following scenarios illustrates a firm that has a sustainable competitive advantage?

Zhang Corp was able to hold its market share of 60 percent in the social networking industry for more than three years.

Sarah paid $900 for a camera that she thought was worth $1100 for all the features included in it. For the consumer electronics firm selling the camera, however, the cost of producing the camera was only $350. What is the consumer surplus in this scenario?

$200

The ____ is a model that links strategy analysis, strategy formulation, and strategy implementation, which together helps managers plan and implement a strategy that can improve performance and result in competitive advantage,

AFI strategy framework

Unlike the financial ratios based on accounting data, total return to shareholders is

An external performance metric.

Which of the following best describes a Level 5 manager in the Level-5 leadership pyramid?

Asoka is the CEO of Green Machines Inc.; he has helped his company in gaining and sustaining a competitive advantage through ethical decision making.

How are the two approaches, strategic planning, and scenario planning, different from the strategy-as-planned-emergence approach?

Relative to strategic planning and scenario planning, strategy as a planned emergence model is a less formal and less stylized approach to the development of strategy.

Underperformance relative to other firms in the same industry or the industry average results in a _____ for a firm.

Competitive advantage

Economic Value creation is best expressed as

Consumer surplus plus firm profit

A resource-based view of a firm provides a model that systematically aids in identifying

Core competencies

The resource-based view of a firm assumes that the

Resource bundles of firms competing in the same industry are unique to some extent and thus differ from one another.

Competitive advantage goes to the firm that achieves the

Largest economic value created.

Which of the following is a drawback of Porter's five forces model?

Managers cannot determine the changing speed of an industry or the rate of innovation.

According to the value chain analysis which of the following is a primary activity?

Marketing and sales

Which of the following statements about strategy is not true?

Operational effectiveness and competitive benchmarking should be treated as strategy

The ______ allows the scanning, monitoring and evaluating of changes and trends in a firm's macro environment.

PESTEL framework

_____ describes a process in which the options one faces in a current situation are limited by decisions made in the past.

Path dependence

Demand for the traditional fast-food providers such as McDonald's, Burger King, and Wendy's has been on a decline in the recent years. Consumers have become more health conscious and demand has shifted to alternative restaurants like Subway Chickk-fil-a and Chipotle. Attempts by McDonald's and Wendy's to steal customers from one another include frequent discounting tactics such as dollar menus.. Such Competitive actions are indicative of

Profitability decreases

Which of the following statements is true about strategic groups?

Profitability varies between different strategic groups.

A firm is said to gain a competitive advantage when it can

Provide products similar to its competitors, but at lower prices.

Although True Ion Inc. and One Electro Inc. operate in the same consumer electronic industry, True Ion Inc. has better sales and brand equity.This is attributed to True Ion Inc.'s commitment to innovation. The company has adequate financial and human capital to invest in research and development, an area in which One Electro Inc. lags behind. In this scenario, which of the following critical assumptions of the resource-based view of a firm has been illustrated?

Resource heterogeneity

An observer may conclude that the organizational culture of Zappos, an online retailer for shoes and clothing, might be the basis for its competitive advantage. However, reverse social engineering to crack Zappos' code of success might be much more difficult for a company trying to exactly imitate its strategy. Thusm the source of Zappos competitive advantage is said to be

Socially competitive

Which of the following approaches to assess competitive advantage is based on the view that noneconomic factors can have a significant impact on a firm's financial performance?

The triple-bottom-line approach

Which is the rule of thumb behind Porter's five forces model?

The weaker the five forces, the greater the industry's profit potential—making the industry more attractive

In the aircraft engine manufacturing industry, at least for large commercial jets, Rolls-Royes and General Electric are the only competitors. There is not a significant threat of entry because

There is not a significant threat of entry because entering the aircraft manufacturing industry requires huge capital investments.

Under the strategy as a planned emergence model, even entry-level employees can help generate strategic initiatives.

True

During strategy implementation, managers primarily focus on deciding the

Type of corporate governance that is most effective and ways in which it can put the formulated strategy into practice.

The CEO of Juliet Computers was the child of parents who had difficulty making enough money to support their family. As a result, he and his siblings did not have access to many advantages that children from wealthier families had. This CEO therefore emphasized making affordable computers that could be bought by low income households. Which of the following does this example demonstrate?

upper-echelons theory