425 ch 1 & 2
Substitute products are not a threat if a company is the market leader.
False
As an industry enters the shakeout stage: (A) rivalry among companies declines. (B) demand grows at a high rate. (C) prices of products increase. (D) excess productive capacity emerges. (E) new entrants come into the market.
d
Demand reaches total saturation in the ____ stage of the industry life-cycle. (A) embryonic (B) growth (C) shakeout (D) maturity (E) decline
d
An impact that the changing industry boundaries have had is that: (A) owners of companies can now define boundaries. (B) there is an increase in the number of competitors for companies. (C) technological changes do not affect companies anymore. (D) the pattern of customer needs does not affect companies anymore. (E) the number of product substitutes available for customers has reduced.
b
Rules of thumb, or heuristics, always help to avoid severe and systematic errors in the decision- making process.
f
Strong brand loyalty and high customer switching costs are low barriers to entering an industry.
f
The more commodity-like that an industry's product is, the lower the intensity of any price war that may develop.
f
When buyers are in a weak bargaining position, companies in the industry must lower their prices to increase profits.
f
Suppliers are most powerful when the products that they sell have many substitutes.
false
The Internet is an example of a: (A) technological force. (B) social force. (C) macroeconomic force. (D) demographic force. (E) global force.
a
Which of the following best defines shareholder value? (A) It refers to the returns that shareholders earn from purchasing shares in a company. (B) It refers to the capital invested in a company by the shareholders. (C) It refers to the efforts taken by a company to sell its shares to prospective shareholders. (D) It refers to the efforts taken by a company to buy back its shares from its shareholders. (E) It refers to the non-monetary benefits that a company provides to its shareholders.
a
Which of the following dimensions is encompassed by a company's business model? (A) Configuring resources (B) Avoiding focus on acquiring new customers (C) Reducing emphasis on product quality
a
Which of the following statements is true about nonprofit organizations? (A) They compete with each other for resources. (B) Their ultimate aim is to maximize shareholder value in order to attract risk capital. (C) Their managers do not need to develop careful strategies, because making a profit is not the organization's goal. (D) They do not have to worry about exceeding budgets.
a
Which of the following statements is true about potential competitors in an industry? (A) They threaten the profitability of established companies. (B) They are usually encouraged by established companies. (C) They find it easier to enter an industry when the entry barriers are high. (D) They find it easier to enter an industry when established companies have economies of scale. (E) They usually have an absolute cost advantage over established companies
a
Philip oversees the processes of the research and development department of his company. He is responsible for all of the activities and tasks undertaken by the department. In the context of strategic management, Philip is most likely to be a _____. (A) corporate-level general manager (B) functional manager (C) managing director (D) CEO
b
The competitive structure of an industry refers to the: (A) number of market segments in the industry. (B) number and size distribution of companies in the industry. (C) number of consumers in the industry. (D) number of manufacturing plants in the industry. (E) number of products produced in the industry.
b
The extent of rivalry among established companies is lowest when: (A) the industry's product is a commodity. (B) demand is growing rapidly. (C) exit barriers are substantial. (D) the industry is entering a decline stage. (E) the fixed costs are high.
b
The level of industry demand: (A) has little effect on competition in the industry. (B) is one of the determinants of the intensity of rivalry in the industry. (C) increases when customers exit a marketplace. (D) does not impact the market share that established companies hold. (E) decreases the rivalry among established companies, when in decline.
b
Which of the following is true of growth industries? (A) They typically have high barriers to entry. (B) They tend to be characterized by weak rivalry. (C) They are characterized by low demands. (D) They increase prices because customers are more aware of the industry's product. (E) They inhibit the development of distribution channels.
b
Systematic errors in the decision-making process are most often caused by: (A) inadequate information. (B) information overload. (C) cognitive biases of decision makers.
c
Which of the following is not a cognitive bias? (A) Escalating commitment (B) Reasoning by analogy (C) Ivory tower thinking (D) Representativeness (E) Illusion of control
c
Which of the following statements is true about complementors? (A) Their impact on industries was first recognized by Porter's five forces model. (B) They have little importance in high-technology industries. (C) They have the power to impact the sales of the industry to which they supply complement products.
c
A group of firms all make tools for baking-pots, pans, measuring cups, and utensils. This group should be referred to as a market segment.
f
One of the factors that distinguish organizations in the nonprofit sector from profit-making businesses is the lack of a need for strategic management.
f