Chapters 1-3 Exam 1
Successful strategic leaders are:
(A) committed to helping the firm to create value for all stakeholder groups. (B) committed to nurturing those around them. (C) decisive. (D) All of these options are correct.
Capabilities that other firms cannot develop easily are classified as:
(A) costly to imitate.
The global economy, globalization, rapid technological change, and the increasing importance of knowledge are creating the need to:
(A) delegate strategic responsibilities to employees "closer to the action."
New markets created by iPods, PDAs, and Wi-Fi are a result of:
(A) disruptive technologies.
A food bank in Florida was struggling to serve its customers. It asked Walmart for help. Walmart sent a team of managers who reorganized storage and transportation. The food bank was able to increase the number of clients served by tenfold. Walmart shared its expertise in:
(A) distribution.
It is important to emphasize that almost all strategic management process decisions have ______ because they are related to how a firm interacts with its stakeholders.
(A) ethical dimensions.
For a restaurant business dependent on drive-thru customers, the major cost disadvantage independent of scale would be if:
(A) favorable locations are not available
Competitor analysis focuses on:
(A) firms with which the company competes directly.
Managers must adopt a new mind-set that values ______ and the challenges that evolve from constantly changing conditions.
(A) flexibility (B) innovation (C) speed (D) All of these options are correct.
The ______ environment is composed of dimensions in the broader society that can influence an industry and the firms within it.
(A) general
Exit barriers to a firm include all of the following EXCEPT:
(A) generic assets.
An owner of a stable of racehorses has been earning below-average returns for more than 15 years. To a colleague, he expressed his determination to stay in horse racing until he died because "racing is in my blood." This individual is probably still racing horses because of:
(A) high barriers to exit.
A product's value is created by each of the following EXCEPT
(A) high cost and highly differentiated features.
Knowledge is composed of all the following EXCEPT:
(A) insight.
The technological segment of environmental analysis includes:
(A) institutions and activities involved with creating new knowledge and translating that knowledge into new outputs.
A firm's mission:
(A) is a statement of a firm's business in which it intends to compete and the customers it intends to serve.
Mighty Green, a residential lawn chemical manufacturer, is committed to gaining market share in its industry. Mighty Green:
(A) is likely to raise the level of competitive rivalry in the industry.
After Amazon lowered the price on its tablets, Samsung eventually lowered the price on its tablets. Samsung needed to do this because:
(A) it is in the same strategic group.
Compared to tangible resources, intangible resources are ______ and ______.
(A) less visible; more difficult to copy.
According to the five forces model, an attractive industry would have all of the following characteristics EXCEPT:
(A) low barriers to entry.
The competition within each strategic group is
(A) more intense than the competition between strategic groups.
A general environmental analysis can be expected to produce all of the following EXCEPT:
(A) objective answers.
The culmination of the strategic management process is:
(A) performance.
BP, in response to the Deepwater Horizon oil spill, expected increased scrutiny from which of the following segments of the general environment?
(A) political/legal
The interests of an organization's stakeholders often conflict, and the organization must prioritize its stakeholders if it cannot satisfy them all. The ______ is the most critical criterion in prioritizing stakeholders.
(A) power of each stakeholder
One popular approach to taking care of the physical environment is:
(A) producing and selling additional green products
Even for companies capable of succeeding in global markets, it is critical that they:
(A) remain committed to and strategically competitive in their domestic market.
The most numerous of the following organizational characteristics are:
(A) resources
All core competencies have the potential to become core:
(A) rigidities.
An analysis of society's attitudes and values would be conducted when studying the ______ segment of the general environment.
(A) sociocultural
A firm has achieved ______ when it successfully formulates and implements a value-creating strategy.
(A) strategic competitiveness
Essentially, _______ has become one of the world's largest markets with 700 million potential consumers
(A) the European Union
William Ackman is a hedge fund manager who owned a large share of J.C. Penney stock. He was also a member of the J.C. Penney board. He tried to get the CEO fired, but the board and top management said he breached his boardroom duties when he publicly disclosed information about the CEO search and financial condition of the company. He resigned from the board of directors. This is an example of a contentious relationship between:
(A) the capital market stakeholders and the organizational stakeholders.
The industrial organization (I/O) model argues that:
(A) the key factor in success is choosing the correct industry in which to compete.
The economic environment refers to:
(A) the nature and direction of the economy in which a firm competes or may compete.
It is increasingly difficult for a firm to develop and sustain a competitive advantage because of the effects of globalization and:
(A) the rapid development of the Internet's capabilities.
Organizational culture refers to:
(A) the social energy that drives, or fails to drive, the organization. (B) the complex set of ideologies, symbols, and core values that are shared throughout the firm. (C) what people do when no one else is looking. (D) All of these options are correct.
In a suburban community outside a city in Alabama, a retail store opened that specialized in dancewear for children and adults. It was moderately successful for five years until the local newspaper published an exposé that scanty lingerie stocked in the back of the store's showroom was selling briskly to a certain clientele. Afterward, the store lost most of its customers and nearly closed. Which segment of the environment did the store owners fail to take into account when they began selling the lingerie?
(A) the sociocultural segment
Effective strategic leaders are chosen based on:
(A) their capabilities and accumulation of human capital over time.
All of the following are true about the strategic decisions managers make about their firm's internal organization EXCEPT that:
(A) they are directly correlated to executive compensation.
The goal of the organization's ______ is to point the firm in the direction of where it would like to be in the years to come.
(A) vision
______ is the ability to analyze, understand, and manage an internal organization in ways that are not dependent on the assumptions of a single country, culture, or context.
(B) A global mind-set
Environmental scanning would be most important for which of the following organizations?
(B) A web design company catering to small businesses
Which of the following represents a competitive intelligence practice that is both legal and ethical?
(B) An executive attends a trade show solely to obtain a competitor's brochures, listen to sales pitches, and ask questions about the competitor's products.
Which of the following is NOT a component of internal analysis leading to competitive advantage?
(B) Analysis of supplier power
New Jersey and New York have the highest state taxes in the United States. They also have high ratios of people moving out compared to people moving into the state. This impacts the ______ aspect of demographic analysis.
(B) geographic distribution
The observation that China reached automotive production overcapacity in 2015, and has a glut of extra cars, is an aspect of the ______ segment of the general environment.
(B) global
The Department of Defense buys aircraft from U.S. companies for national security reasons. This is an example of a ______ barrier to entry.
(B) government policy
PGG Mining is making a strategic decision whether to shut down a coal mine in Pennsylvania. It is important to consider that the decision:
(B) has ethical implications for organizational stakeholders
The concepts of Guanxi, Wa, and Inhwa all convey the general idea of:
(B) interpersonal relationships.
A person who has made a successful decision when no obviously correct model or rule is available or when relevant data are unreliable or incomplete has exercised:
(B) judgment.
Strategic leaders are:
(B) located in different areas and levels.
According to the five forces model, an unattractive industry would include all of the following characteristics EXCEPT:
(B) low supplier power due to commodity inputs.
The critical executive skill of the current business age is the ability to:
(B) manage human intellect.
Southwest Airlines has a complex interrelationship between its culture and staff that adds value in ways that other airlines cannot, such as jokes on flights or the cooperation between gate personnel and pilots. These examples illustrate which of the following criteria for sustainable competitive advantage?
(C) Costly to imitate
Which of the following pairs of companies would be least likely to be examined together as part of competitive analysis?
(C) Netflix and Microsoft
______ is an investor's uncertainty about the economic gains or losses that will result from a particular investment.
(C) Risk
Economies of scale refers to the fact that as the:
(C) quantity of product produced in a given time period increases, the cost of manufacturing each unit decreases.
A major assumption about the strategic management process is that it is
(C) rational.
When rival firms compete aggressively by trying to attract competitors' customers, this might be an indication of:
(C) slow industry growth.
A financial management firm has existed for more than 70 years. Some of its original clients' grandchildren are now clients of the firm themselves. The partners and staff of the firm have spent most or all of their careers with the firm. Many have even married into each other's families. This firm has capabilities that would be costly to imitate because of its
(C) social complexity.
The environmental segments that make up the general environment typically will NOT include:
(C) substitute products or services.
Many firms outsource the payroll function of paying employees to firms such as ADP. Payroll is a(n):
(C) support function.
Buyers are powerful when
(C) switching costs are low.
Understanding how new knowledge can develop new products, processes, or materials is a result of analyzing the ______ segment of the general environment.
(C) technological
A local restaurant, Farm Fresh Ingredients, has become highly successful through its menu, based solely on organically raised chicken and beef, and organic seasonal produce. It has opened new locations in other cities, and these new locations are becoming highly profitable. Farm Fresh can expect that, at best, its competitive advantage will be:
(C) temporary.
High-level maintenance on aircraft is performed by the manufacturer. This service after the sale means that in the aircraft industry:
(C) the competitive rivalry in the industry is severe.
Competitor intelligence is:
(C) the data that the firm gathers to understand competitors' objectives, strategies, assumptions, and capabilities.
All of the following are characteristics of the global economy EXCEPT:
(C) the increased use of tariffs to protect industries.
Which of the following statements is most consistent with the I/O view? Performance of a firm is most directly attributable to:
(C) the profitability of the industry in which the firm competes.
Suppliers are powerful when:
(C) they offer a credible threat of forward integration.
Value chain analysis is a tool used to:
(C) understand the parts of the firm's operation that create value and those that do not.
An analysis of income distribution would include all of the following EXCEPT:
(C) wage differentials between male and female employees working for a large manufacturer.
The proper matching of what a firm can do with what it might do:
(C) yields insights the firm requires to select its strategy.
Dissatisfied capital market stakeholders may:
(D) All of these options are correct.
Which of the following intelligence-gathering techniques is most likely to be legal and ethical?
(D) Attending trade show presentations given by a competitor's employees
Which of the following is NOT an entry barrier to an industry
(D) Bargaining power of suppliers
______ has become the second-largest economy in the world.
(D) China
The rate of technological diffusion is increasing. Which of the following was fastest in penetrating 25 percent of homes in the U.S. market
(D) Internet
The large amount of advertising by firms such as Procter & Gamble and Colgate-Palmolive is an example of what kind of barrier to entry?
(D) Product differentiation
In the resource-based model, which of the following factors would be considered a key to organizational success?
(D) Skilled employees
Which of the following would be an example of the application of the next major technological opportunity for organizations?
(D) SpaceX's reusable space vehicle
Which of the following is NOT a factor affecting sustainability of a competitive advantage?
(D) the length of time the core competence has existed
A competitor analysis includes all of the following about competitors EXCEPT
(D) traditions
To build social capital whereby resources such as knowledge are transferred across organizations requires ______ between the parties.
(D) trust
Counterfeiting goods and exporting them from China is
(D) unethical and illegal.
The next critical technological opportunity for organizations is predicted to be:
(D) wireless communications.
Blood banks are highly dependent on donors. In the terminology of industry analysis, which statement about donors is accurate?
(A) Blood donors are suppliers and are powerful because of the critical nature of what they provide to the blood bank.
According to Hitt, the final responsibility for forming the organization's mission lies with the:
(A) CEO.
Which of the following is a true statement about capabilities?
(A) Capabilities are often developed in specific functional areas such as manufacturing, R&D, and marketing.
______ is an example of a capability that is based in the functional area of distribution.
(A) Effective use of logistics management techniques
The aircraft industry has long been dominated by two large aircraft manufacturers, Boeing and Airbus. The demand for major aircraft is low, and Boeing and Airbus aggressively compete for orders from airlines. What effect will these conditions have on the domestic airline industry?
(A) It will make the airline industry more attractive because of decreased supplier power
Which of the following statements about organizational knowledge is correct?
(A) Knowledge is an intangible resource. (B) The importance of knowledge is increasing. (C) The value of knowledge as a proportion of shareholder value is increasing. (D) All of these options are correct.
______ innovation is a term used to describe how rapidly and consistently new, informationintensive technologies replace older ones
(A) Perpetual
______ are the source of a firm's ______, which are the source of the firm's ______.
(A) Resources; capabilities; core competencies
Which of the following, identified in an analysis of the general environment, is an opportunity for an entrepreneur who wishes to open a business providing "Fitness for Life" physical conditioning services (strength, balance, and flexibility training) in a city of 100,000 people?
(A) The average age of the population in his community is high.
A certain marble quarry provides a unique type of marble that is richly colored and strikingly veined. It has been used for churches and public buildings throughout the world. The architect of a new headquarters for a prestigious Fortune 500 firm has specified the use of this marble, and this marble only, for the project. Which of the following statements is most likely to be true?
(A) The cost of the marble will be expensive because of the bargaining power of the supplier.
Several months ago, a restaurant developed a new appetizer that is a hit with customers. Many customers go to the restaurant just for the appetizer, and it was at the center of a recent highly positive review by a food critic. Preparation involves common ingredients and average culinary skills but requires a very high oven temperature, which significantly increases utility costs. Several competing restaurants have since added their own version of the appetizer to their menu. Which criterion for assessing capabilities/core competencies is met?
(A) The restaurant has the capability to develop something that is valuable.
Generally speaking, product market stakeholders are satisfied when:
(A) a firm achieves a balance between profit margins, costs paid to suppliers and prices set for customers.
All competitive advantages have:
(A) a limited life.
One reason executive judgment can be a particularly important source of competitive advantage is that judgment:
(A) allows a firm to build a strong reputation.
The strategic leader's work is characterized by:
(A) ambiguous decision situations where the best course of action is not always easy to identify
The likelihood of entry of new competitors is affected by ______ and ______
(A) barriers to entry; expected retaliation of current industry organizations
To provide a sustainable competitive advantage, a capability must satisfy all of the following criteria EXCEPT:
(A) be technologically innovative.
Internal analysis enables a firm to determine what the firm:
(A) can do.
In smaller, new venture firms, returns are sometimes measured in terms of:
(D) the amount and speed of growth.
Circuit Inc. is a manufacturer of a broad range of consumer electronics products. These consumer products are all highly profitable. The firm also manufactures a low-cost component that is an essential differentiating feature for most of its consumer products. The costs to manufacture this component have risen sharply in recent months. Internal estimates now indicate the company is breaking even on the manufacture of this component. Which of the following is most likely?
(B) Circuit will likely continue to manufacture the component, even at a loss, due to high strategic stakes.
______ provides the firm with new and up-to-date skill sets, which allow it to adapt to its environment as it encounters changes.
(B) Continuous learning
Which of the following is NOT an activity used in the external environmental analysis process?
(B) Decrypting
Which of the following is NOT a reputational resource?
(B) Employees' opinions of the firm as a terrible place to work
Firms use both the ______ and ______ models. In fact, these models complement each other in that one focuses outside the firm while the other focuses inside the firm.
(B) I/O; resource-based
Which of the following is TRUE about outsourcing?
(B) Outsourcing allows firms to concentrate on those areas in which they can create value.
The CEO of Ridgeway, Inc., realizes that the company's survival depends on developing and acquiring knowledge. Which of the following actions by the CEO would be most consistent with this need?
(B) Planning extensive employee training and hiring educated and experienced employees
Refuge Nursing Homes, Inc., (RNH) has been highly profitable in the past 10 years, providing its investors higher returns than those earned by its direct competitors' investors. RNH has a reputation for providing high-paying managerial and hourly-employee jobs. However, recent investigations have revealed that the nursing home residents have been provided substandard care, including non-nutritious and unappetizing meals, non-functional medical equipment, and inadequate patient-care staffing. Which statement best describes the situation?
(B) RNH has prioritized the demands of capital market stakeholders and organizational stakeholders, over the demands of product market stakeholders.
Media content has moved from paper, tape, and film to a digital world based on Internet technology. From the perspective of the five forces model, which force is most relevant here
(B) Substitutes
Which of the following would NOT be identified in an analysis of the economic portion of the general environment?
(B) The ability of Ford to issue new debt in light of its recent financial performance
An investor is considering buying a restaurant that has been in operation for a number of years. The restaurant has a highly regarded chef and many long-term kitchen and wait staff who work together smoothly. It has a reputation for dishes of consistently high quality and an appealing dining atmosphere. What should the investor consider when making a decision?
(B) The investor will find that the restaurant's financial statements undervalue the true value of its resources.
Characteristics of the current economic segment include all of the following EXCEPT:
(B) a clear understanding of future economic opportunities and threats.
Value consists of:
(B) a product's performance characteristics and attributes for which customers are willing to pay.
DWK Foods has developed a line of cookies and candies sweetened exclusively with organic honey. Although DWK is selling some of the products over the Internet, in order to gain economies of scale the products must be sold in retail outlets as well. The main barrier to entry DWK is likely to encounter here is
(B) access to distribution channels
Value chain activities are:
(B) activities or tasks the firm completes in order to produce products and then sell, distribute, and service those products in ways that create value for customers.
A company's ability to acquire knowledge is:
(B) an important source of competitive advantage in virtually all industries.
In the strategic management process ASP stands for
(B) analyses, strategies, and performance
Tangible resources include:
(B) assets that can be observed and quantified.
All of the following are aspects of the political/legal segment of the general environment EXCEPT
(B) attitudes and values
Because firms combine tangible and intangible resources to create capabilities:
(B) capabilities are often based on developing, carrying, and exchanging information and knowledge through the firm's human capital.
A retail outlet can attempt several remedies to improve profitability to meet the expectations of its _______ stakeholders, including closing stores, changing the top management team, and seeking potential buyers
(B) capital market
Gamma, Inc., has struggled for industry dominance with Ardent, Inc., its main competitor, for years. Gamma has gathered and analyzed large amounts of competitive intelligence about Ardent. It has observed as much of the firm's internal functioning and technology as it can legally, yet Gamma cannot understand why Ardent has a competitive advantage over it. The source of Ardent's success is
(B) causally ambiguous.
Firms that achieve competitive parity can expect to:
(B) earn average returns.
A major reason outsourcing is effective is that:
(B) few firms possess superior capability in all primary and support activities.
Acme Auto Repair has a thriving business based on its reputation for high-quality work, honesty, and skilled employees. For continued long-term success, Acme's owner should:
(B) focus on developing Acme's future competitive advantages.
Firms within strategic groups:
(B) follow similar strategies across certain dimensions.
The three parts of the external environment that affect a firm's strategic actions are:
(B) general, industry, and competitor.
A prominent national website services company runs Super Bowl advertisements showing a small business owner working alone in the office on a project, during the big game. The message of the ad is that the company understands the sacrifices of its customers. This ad seeks to convey a sense of the organization's ____ to the product market stakeholders.
(B) mission to radically shift the global economy toward small businesses
Judgment is the capacity for making a successful decision when:
(B) no obviously correct model or rule is available.
Organizational culture is:
(B) not easily imitable
Government agencies are known for having so many layers and rules that decisions are made slowly and inefficiently. In this case the ______ resource is a detriment to taxpayers using and paying for the bureaucracy.
(B) organizational
A veterinary practice has added a pet boarding and grooming facility. Most of the practice's competitors also provide these services. The veterinary practice is gaining competitive:
(B) parity.
Global warming and energy consumption trends are aspects of the ______ segment of the general environment that firms should monitor.
(B) physical
Strategic leaders, ______, often work long hours, and their work is filled with ambiguous decision situations.
(B) regardless of their location in the organization
A major U.S. manufacturer of children's toys believes its main competitive advantage lies in its continuing development of innovative toys and games. The company is facing increasing competition on price, and it is strongly considering outsourcing to offshore firms as a means of reducing costs. The LAST function this firm should consider outsourcing is:
(B) research and development.
All of the following are assumptions of the industrial organization (I/O) model EXCEPT
(B) resources to implement strategies are firm-specific and attached to firms over the long-term.
Firms that have strong positive relationships with suppliers and customers are said to have ______, an essential ingredient to creating value.
(B) social capital
Knowledge transfer and access to resources within the value chain are enhanced by:
(B) social capital.
A key purpose of a mission statement is to inform _________what a firm is, what it seeks to accomplish and who it seeks to serve.
(B) stakeholders
In order to cope with hypercompetition, firms need to develop ______ through continuous learning.
(B) strategic flexibility
A ______ is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.
(B) strategy
The highest amount a firm can charge for its products is most directly affected by:
(B) the cost of substitute products.
According to Hitt, the primary drivers of hypercompetition are:
(B) the emergence of a global economy and rapid technological change.
Although Alibaba is competing in the internet services industry, it has improved its performance by focusing on innovation and service diversification. This improved performance is best explained by:
(B) the resource-based model.
All of the following are implications of strategic groups EXCEPT:
(B) the strength of the five forces is the same across strategic groups.
The three conditions that characterize difficult managerial decisions concerning resources, capabilities, and core competencies are
(B) uncertainty, complexity, and intraorganizational conflicts.
Subscriptions to the New York Times have been decreasing as more customers receive their news through other media. At the same time, advertisers have shifted portions of their spending to other media. The NYT's managers are making decisions under:
(B) uncertainty.
A large corporation has earned a reputation for being a challenging work environment for employees, placing demands on employees' time and pushing them to accomplish tasks, sometimes with little recognition. A recent audit found that the company was denying employees overtime pay despite the extra work. This is a reflection of the company's:
(B) unethical corporate culture.
From a customer's point of view, for an organization's capability to be a core competence it must be:
(B) valuable and unique.
In the airline industry, frequent-flyer programs, ticket kiosks, and e-ticketing are all examples of capabilities that are ______ but no longer _____.
(B) valuable; rare
The capabilities used to create the sustainability/green initiatives at Walmart and Target are ______ but less likely to be ______.
(B) valuable; rare
The key to achieving competitiveness, earning above-average returns, and remaining ahead of competitors in the long run is to manage current core competencies:
(B) while simultaneously developing new ones.
The ______ are those with the potential to be formed into core competencies as the foundation for creating value.
(C) "right" resources
Which of the following is NOT an external event that reveals the "dark side" of core capabilities?
(C) A firm changes its focus to a new core competence.
______ should establish a firm's individuality and should be inspiring and relevant to all stakeholders.
(C) A mission
______ can be viewed as the capacity to take action.
(C) Core competencies
Which of the following is NOT required for a firm to achieve strategic competitiveness and earn above-average returns from its core competencies
(C) Core competencies must be internationalized.
McDonald's culture, with an emphasis on cleanliness, consistency, service, and the training that reinforces the value of these characteristics, illustrates which of the following criteria for sustainable competitive advantage
(C) Costly to imitate
Clarissa is a sales representative for a large pharmaceutical firm. While calling on one of her major clients, the purchasing director of a hospital, the client told her confidential information that a sales representative from a competing firm had passed on to him. The information completely contradicts Clarissa's firm's understanding of the competitor's business strategy and would allow Clarissa's employer to gain many of the competitor's clients. What ethical implications may result from this situation?
(C) The ethical dilemma here is the right of competitors not to reveal certain information.
Demographic changes include variations in income distribution. Which of the following statements is true?
(C) The general loss in real income has been somewhat offset by the increase in dual-career couples
ACME Corp. is a leading provider of radios to the commercial market. Its products all rely on printed circuit-board technology. ACME has protected its market leadership with continued advancements in this technology, which it patents. A competitor has developed a radio for this market with equal performance but uses a software-based technology instead of circuit boards. ACME's technology leadership fails which capability test?
(C) The substitutability test
All of the following are tangible resources EXCEPT:
(C) a firm's reputation.
Once a firm has determined its competitors' future objectives, current strategy, assumptions, and strengths and weaknesses, its next step is to develop:
(C) a response profile.
Valuable capabilities:
(C) allow the firm to exploit opportunities or neutralize threats in its external environment.
The firm's ______ provide the foundation for choosing one or more ______ and deciding how to implement them.
(C) analyses; strategies
Product differentiation refers to the:
(C) belief by customers that a product is unique.
The communications industry is broadly defined as encompassing all of the following EXCEPT:
(C) book retailers.
A competitive advantage:
(C) can be identified when competitors are unable to duplicate or find it too costly to try to imitate
Acme Valves, Inc., has been a successful player in the oil field supply industry in the last 15 years. Acme maintained its strategy and product characteristics over this time period. However, the company has experienced declines in sales and profits over the last four quarters. The CEO of Acme should
(C) conduct an analysis of the external environment
Innovation, consumer understanding, brand-building, go-to-market, and scale are activities that P&G performs well and are examples of the company's:
(C) core competencies.
In a diversified firm, corporate-level strategy is concerned with:
(C) determining in which businesses to compete and how resources will be allocated between businesses.
Henry Ford once said, "If I had asked people what they wanted, they would have said faster horses." The invention of the car is an early example of:
(C) disruptive technologies.
A firm's core competencies, integrated with an understanding of the results of studying the conditions in the external environment, should:
(C) drive the selection of strategies.
The I/O model is grounded in:
(C) economics.
When firms lay off employees, they are:
(C) eroding the organization's knowledge resources.
All of the following are forces that create high rivalry within an industry EXCEPT:
(C) fast industry growth
By emphasizing core competencies when formulating strategies, companies learn to compete primarily on the basis of:
(C) firm-specific differences
Because of threats and risks in the global environment, some firms choose to take a more cautious approach by:
(C) focusing on global niche markets
Examples of support activities include all of the following EXCEPT:
(C) follow-up service.
When analysts develop feasible projections of future events and how quickly they will occur based on observed changes and trends, they are: engaged in
(C) forecasting.
If a firm offers a service that is valuable, rare, and costly to imitate, but a substitute exists for the service, the firm will:
(C) have a temporary competitive advantage.
A major department store chain has a strict policy of banning photographs or videos of its sales floor or back-room operations. It also does not allow academics to conduct studies of it for publication in research journals. In fact, some of its own top managers refer to the management's policies on secrecy as "verging on paranoid." These policies indicate that the top management of the firm believes the organization's core competencies are:
(C) imitable.
Customer loyalty programs such as airline frequent-flyer miles are an attempt to
(C) increase customers' switching costs.
Value chain activities include all of the following EXCEPT:
(C) management information systems.
Compared to intangible resources, tangible resources are ______ constrained because they are ______ to leverage.
(C) more; harder
Tools such as ______ help the firm focus on its core competencies as the source of its competitive advantages
(C) outsourcing
The "liability of foreignness" is the
(C) overall risk of participating outside a firm's domestic country when entering global competition
Amazon is building a new distribution facility in Robbinsville, New Jersey. It is immediately off the exit of a major road. This is an example of a(n) ______ resource.
(C) physical
New entrants to an industry are more likely when:
(C) product differentiation in the industry is low
Outsourcing is the:
(C) purchase of a value-creating activity from an external supplier.
Aardvark Corp. has three products. Two products together make up two-thirds of revenues and constitute 50 percent of company profits. Aardvark's third product makes up one-third of sales. With profitability far above the industry average, this product is responsible for one-half of Aardvark's profits. Which of the following statements regarding assessment of the general environment is accurate for Aardvark?
(D) The company should monitor the general environment for changes that might affect the revenue and profitability of all products.
Golden Lotus, an exercise club targeting healthy individuals over 50, is located in a fast-growing city in the Southwest. Which of the following factors that may have an effect on the success of Golden Lotus is the most directly controllable by the company?
(D) The power of the customers/buyers
Which of the following explains, in part, why rivalry among McDonald's, Wendy's, and Burger King is intense?
(D) These companies are trying to find ways to differentiate their products.
______ is measured by a product's performance characteristics and its attributes for which customers are willing to pay.
(D) Value
All of the following are ethical sources of data for external analysis EXCEPT:
(D) a competitor's confidential memos.
Charmed by Claire is a successful retail boutique that sells women's accessories. Claire, the owner/manager, knows that women have many options when buying jewelry. When customers enter her store they are greeted by name and given prompt, friendly attention. Customers return to the store because the service is excellent. Claire says the most important decision she makes is hiring the best staff because customer service is vital to her business. Customer service is:
(D) a core competency.
An industry is defined as
(D) a group of firms producing products that are close substitutes.
All of the following were traditional sources of competitive advantage EXCEPT:
(D) a highly educated labor market.
A decision that results in failure:
(D) allows for learning
Capabilities:
(D) are often developed in specific functional areas.
Firms use the five forces model of competition to identify the ______ of the industry. It is measured by its _______.
(D) attractiveness; profitability.
Capabilities typically come from:
(D) combining resources.
Applications developed for iPhones make the phone more valuable to iPhone users. App developers are ______ to Apple.
(D) complementors
The owner of a store that sells fine-quality fabrics for home seamstresses bemoans the fact that few young women know how to do fine tailoring, much less simple dressmaking. Many potential customers are unable to appreciate the premium quality of the fabrics and are deterred by the high prices, as well as the complexity of fine sewing. In the past, the store had a strong demand for fabrics, large classes for women learning the fine points of sewing, and a reputation for excellent service and technical advice. Now the store is earning lower-than-average returns. This case is an example of:
(D) core competencies that have become core rigidities.
In analyzing the demographic segment of the general environment, one typically examines all of the following factors EXCEPT:
(D) cultural values.
Competitor intelligence could ethically come from all of the following EXCEPT:
(D) eavesdropping.
The U.S. Hispanic market is the third-largest "Latin American" economy behind Brazil and Mexico. This impacts the ______ aspect of demographic segment analysis.
(D) ethnic mix
The recent joint ventures formed by BP with Russian and Indian partners show the importance of the ______ segment of the general environment in those countries that BP and other oil firms have to manage when contending with scarce resources.
(D) global
The economic interdependence among countries which is reflected in the flow of goods, services, financial capital, and knowledge across country borders is defined as:
(D) globalization.
Globalization has led to
(D) higher performance standards including quality and cost.
An analysis of the economic segment of the external environment would include all of the following EXCEPT:
(D) income distribution.
All of the following are examples of efforts by firms to address the physical segment of the general:
(D) increase in hiring of women and minorities at Microsoft.
As customers come to believe that a firm's product is unique, this allows the firm to:
(D) obtain loyal customers.
A company competing in a single product market has
(D) one business-level strategy and one corporate-level strategy.
The challenge and difficulty of making effective decisions are implied by preliminary evidence that ______ of organizational decisions fail.
(D) one-half
Green design, sustainable packaging, waste management, and energy efficiency are aspects of the ______ segment of the general environment that companies have sought to address with environmental sustainability initiatives.
(D) physical
One capability that can be learned from failure is when to:
(D) quit.
The Obama administration sought to pursue policies that would
(D) reduce the amount of work U.S. companies outsource to firms in other nations.
The use of the Internet by Netflix to collect data on customer preferences is an example of:
(D) scanning.
Coca-Cola and PepsiCo have been accused of contributing to the obesity problem in the United States. This accusation comes from the ______segment of the general environment.
(D) sociocultural
The corporate research division of Siemens files, on average, 25 patents a day. The patents are a(n) ______ resource.
(D) technological
Costly-to-imitate capabilities can emerge for all of the following reasons EXCEPT:
A) lack of scientific transference.
The threat from substitutes is high when:
B) the substitute product's price is lower than the industry product's price.
How is consolidation among fuel providers serving airport facilities viewed in the five forces model of competition?
C) As an increase in the bargaining power of suppliers of a critical input.
Compared to tangible resources, intangible resources are:
C) a superior source of capabilities.
Strategic delegation helps:
C) avoid too much managerial hubris.
A business-level strategy describes
C) the business unit's actions to exploit its competitive advantage over rivals.
A manufacturer of washing machines has expanded its plant and has created excess capacity, just as the general economy has taken a downturn. The company is likely to:
D) offer rebates and incentives for customers who purchase washing machines.
When consumers change mobile phone and data service providers, they may be required to maintain service with the provider for a specified time period. This is an example of a:
D) one-time cost customers incur when buying from a different supplier.
SWOT stands for
D) strengths, weaknesses, opportunities, and threats.
The political/legal segment of an environment represents:
The political/legal segment of an environment represents:
Above-average returns are
returns in excess of what an investor expects to earn from other investments with a similar level of risk.
The strategic management process is;
the formulation and implementation of a full set of commitments, decisions, and actions required for the firm to achieve above-average returns and strategic competitiveness.