MANA 3311 Module 8

Firms in an industry can avoid the threat of firms that have not yet entered the industry by ______. Multiple choice question. keeping their profits high erecting barriers to entry causing exit costs to spike

erecting barriers to entry

Emphasis on particular customers, products, or geographic locations characterizes ______. Multiple choice question. lean manufacturing business process re-engineering focus strategy

focus strategy

Strategic management relates to the ways firms ______ the decisions they make. (Select all that apply.) Multiple select question. implement evaluate rank formulate

implement evaluate formulate

Click and drag on elements in order Put the steps in value chain analysis in order. Begin with the first step at the top and proceed to the last step at the bottom.

1. Present a graph of each activity in which the firm is involved 2. Figure out the factors that affect costs in each of the firms activities 3. Decide how to perform activities differently in order to outperform competitors costs

What is the main advantage of SWOT analysis as a tool? Multiple choice question. Any firm can use it to address a broad set of issues. The result is a rigorous and thorough industry analysis. It is objective and quantitative.

Any firm can use it to address a broad set of issues. Reason: Correct. The main advantage of SWOT analysis as a tool is that any firm can use it to address a broad set of issues.

Match the type of integration with the example.

Backward vertical integration matches Choice A firm acquiring one of its suppliers , Choice A firm acquiring one of its manufacturers Forward vertical integration matches Choice A firm acquiring one of its distributors , Choice A firm acquiring one of its wholesalers

______ vertical integration allows a firm to exert more bargaining power, while ______ vertical integration allows a firm to have more control over supply and distribution. Multiple choice question. Backward; forward Forward; tapered Tapered; backward

Backward; forward

What are some of the ways a firm can build a differentiation strategy? (Select all that apply.) Multiple select question. Beat other firms on product prices. Become known for high quality. Communicate distinctive features. Build a world-renowned brand.

Become known for high quality. Communicate distinctive features. Build a world-renowned brand.

______ have a large amount of power over firms when they are sensitive to prices. Multiple choice question. Buyers Suppliers Competitors

Buyers

Classify each explanation as either competitive or corporate strategy.

Competitive strategy matches Choice How a firm goes about gaining and maintaining a competitive advantage , Choice An integrated pattern of decisions a firm makes to achieve objectives Corporate strategy matches Choice How a multi-business firm is managed , Choice How a multi-business firm can be more profitable than a collection of individual businesses in the firm's portfolio

Which statement best describes the difference between competitive and corporate strategy? Multiple choice question. Corporate strategy has a better chance of giving a firm a sustainable competitive advantage than competitive strategy. Competitive strategy is used with international business portfolios, while corporate strategy is better suited for domestic-only portfolios. Competitive strategy is focused on garnering a sustainable competitive advantage, whereas corporate strategy is concerned with developing a parenting advantage.

Competitive strategy is focused on garnering a sustainable competitive advantage, whereas corporate strategy is concerned with developing a parenting advantage.

Which of these are ways firms can position themselves competitively? (Select all that apply.) Multiple select question. Cost leadership Differentiation Vertical integration

Cost leadership Differentiation

Which of the following statements is most accurate regarding SWOT analysis? Multiple choice question. During the strategy process, managers conduct both an external and an internal analysis. The result is called a SWOT analysis. The analysis of strengths, weaknesses, opportunities, and threats has the advantage of providing a laundry list of items within each category. SWOT analysis is geared toward improving organizational efficiency, whereas strategic management focuses on organizational effectiveness.

During the strategy process, managers conduct both an external and an internal analysis. The result is called a SWOT analysis. Reason: Correct. During the strategy process, managers conduct both an external and an internal analysis. The result is called a SWOT analysis.

Management must account for what aspects when making strategic decisions? (Select all that apply.) Multiple select question. External weaknesses External environment Internal capabilities Internal resources

External environment Internal capabilities Internal resources

Which statement best describes differentiation strategy? Multiple choice question. Figuring out how to offer something unique, for which customers are willing to pay a premium Earning more profits by optimizing manufacturing and decreasing inventories Offering something to customers that is acceptable and that beats competitors' costs

Figuring out how to offer something unique, for which customers are willing to pay a premium

Select the most accurate statement about strategic management. Multiple select question. The most popular way for firms to analyze industries and increase their chances to be competitive is the value creation framework. Firms that can create value better than their competitors are well-positioned to capture value and thus earn superior profits. Industry analysis allows firms to figure out their primary sources of value creation.

Firms that can create value better than their competitors are well-positioned to capture value and thus earn superior profits. Reason: Correct. Firms that can create value better than their competitors are well-positioned to capture value and thus earn superior profits.

Which statement best describes the relationship between the five forces framework and competitive positioning? Multiple choice question. General industry profits are affected by the five forces; firm-level profitability is affected by competitive positioning. The five forces framework dictates whether an organization will succeed with a particular competitive positioning strategy. Cost leadership stems from the five forces; differentiation stems from competitive positioning.

General industry profits are affected by the five forces; firm-level profitability is affected by competitive positioning. Reason: Correct. The statement that best describes the relationship between the five forces framework and competitive positioning is that general industry profits are affected by the five forces; firm-level profitability is affected by competitive positioning.

Which of these conditions can make the threat of rivalry high? (Select all that apply.) Multiple select question. A high level of overall industry growth Having a large number of firms in an industry Multiple firms in an industry offering similar products or services

Having a large number of firms in an industry Multiple firms in an industry offering similar products or services

Which step in the analysis of a firm's resources and capabilities determines the sustainability of a competitive advantage? Multiple choice question. Identify resources that are rare and difficult to imitate. Identify resources that are rare and valuable. Identify resources that are valuable and difficult to imitate.

Identify resources that are rare and difficult to imitate. Reason: Correct. Identifying resources that are difficult to imitate and rare is a step in the analysis of a firm's resources and capabilities that determines the sustainability of a competitive advantage.

Which of these are some of the strategic implications of the five forces framework? (Select all that apply.) Multiple select question. It helps companies to reason backwards in order to look to the future. It highlights industry structure as a driver of competition intensity and firm profitability. It illustrates that higher threats mean greater value capture for firms.

It helps companies to reason backwards in order to look to the future. It highlights industry structure as a driver of competition intensity and firm profitability.

Match each description with the correct step in formulating a cost leadership strategy.

Looking closely at each activity in which the firm is involved matches Choice Value chain analysis Determining which factors affect costs for each activity matches Choice Cost driver analysis Determining ways to outperform competitors, based on costs matches Choice Competitor benchmarking

What can help a firm create more value and thus maintain competitive advantage over another firm in the same industry? (Select all that apply.) Multiple select question. Offering unique services or products Figuring out how to keep costs lower than competitors Charging a lower price than competitors

Offering unique services or products Figuring out how to keep costs lower than competitors

Match each description with oligopoly or monopoly.

Oligopoly matches Choice GMC, Ford, and Chrysler are the major players in the U.S. auto industry. , Choice In the United States, the primary providers of cellular service are Verizon, Sprint, T-Mobile, and AT&T. Monopoly matches Choice De Beers had near total control over the diamond market during the 20th century.

Which statement explains how resources can be a source of a sustainable competitive advantage? Multiple choice question. Resources that are rare and difficult for others to imitate will generate advantages now and into the future. Valuable resources generate sustainable advantages because they bring in the most revenues. Rare resources can generate sustainable competitive advantage because they are difficult for other firms to duplicate.

Resources that are rare and difficult for others to imitate will generate advantages now and into the future.

Which statement best describes how SWOT analysis fits into the strategy process? Multiple choice question. SWOT analysis lays the groundwork for the firm to identify and select among strategic alternatives. After managers identify and evaluate strategic alternatives, SWOT analysis provides the data to drive final selection. The strategy process is a starting point that helps managers reach the end goal of a successful SWOT analysis.

SWOT analysis lays the groundwork for the firm to identify and select among strategic alternatives. Reason: Correct. SWOT analysis fits into the strategy process by laying the groundwork for the firm to identify and select among strategic alternatives.

Which statement best describes the first step of the strategy process? Multiple choice question. Selecting the best strategy for the firm and putting it into practice Evaluating the firm's culture, key relationships, and shortcomings Searching for new possibilities as well as trends/changes that may affect the firm

Searching for new possibilities as well as trends/changes that may affect the firm Reason: Correct. The first step of the strategy process can be described as searching for new possibilities as well as broad trends/changes that may affect the firm.

In which circumstances would the threat of substitutes be less likely? (Select all that apply.) Multiple select question. Switching costs are high. Existing substitutes' prices are falling. Customers must put a lot of time into learning how to use substitutes.

Switching costs are high. Customers must put a lot of time into learning how to use substitutes.

The five forces framework focuses on the ______ part of SWOT analysis. Multiple choice question. Threats Weaknesses Strengths Opportunities

Threats

In regard to analyzing a firm's resources and capabilities, match the steps to take with examples of how to do each step.

Which of our resources can we use to create new offerings and meet customers' needs? matches Choice Determine which of the firm's resources and capabilities are valuable. What are we capable of doing that is unique to our firm? matches Choice Use benchmarking to identify the firm's rare resources and capabilities. What are the things we do exceptionally well that competitors can't figure out? matches Choice Gauge the inimitability of the firm's resources and capabilities.

Industry fragmentation is defined as ______. Multiple choice question. loss of product differentiation when multiple firms have similar offerings a situation in which there are many companies competing in an industry with no dominant competitors an industry comprised of a small number of firms with large market shares

a situation in which there are many companies competing in an industry with no dominant competitors Reason: Correct. Industry fragmentation is defined as a situation in which there are many companies competing in an industry with no dominant competitors.

Firms are likely to face higher threat of substitutes when substitutes are ______. (Select all that apply.) Multiple select question. advantageous to consumers becoming increasingly affordable time-consuming to learn

advantageous to consumers becoming increasingly affordable

Strategic decisions require integration, because they must ______. Multiple choice question. translate into higher profits and lower costs align with other decisions and support the mission of the firm distinguish strategy content from strategy process

align with other decisions and support the mission of the firm Reason: Correct. Strategic decisions require integration, because they must align with other decisions and support the mission of the firm.

Focus strategy is defined as ______. Multiple choice question. an emphasis on particular customers, products, or geographic location a set of methods to reduce defects, inventories, and other waste in the manufacturing process a process of analyzing business processes to identify inefficiencies that have developed over time

an emphasis on particular customers, products, or geographic location

Firms can face a threat from other firms that have not yet entered the industry when ______. Multiple choice question. barriers to entering the industry are low exit costs are high industry growth slows

barriers to entering the industry are low Reason: Correct. Firms can face a threat from other firms that have not yet entered the industry when barriers to entering the industry are low.

The term ______ describes how a firm's decisions and policies integrate to increase profits. Multiple choice question. strategic management competitive positioning business model

business model Reason: Correct. The term "business model" describes how a firm's decisions and policies integrate to increase profits.

Related diversification is defined as expansion into businesses with ______. Multiple choice question. common products, technologies, or processes little or no common products, technologies, or processes very few products, technologies, or processes

common products, technologies, or processes

Some advantages of SWOT analysis are that it helps managers to ______. (Select all that apply.) Multiple select question. communicate the results of environmental analysis go deeper into the economics of their industries in a more thorough way provide for a quantitative analysis of the benefits, costs, or risks of a decision identify the need for organizational change and the path for those changes

communicate the results of environmental analysis identify the need for organizational change and the path for those changes

Bargaining power of buyers increases when ______. (Select all that apply.) Multiple select question. buyers' level of knowledge about the product/service is low costs related to switching suppliers are low there are relatively few buyers

costs related to switching suppliers are low there are relatively few buyers

Two firms in the same industry can experience different profit levels, even though they are subject to the same five forces. This type of competitive advantage happens primarily because one firm ______. Multiple choice question. is more entrepreneurial than the other creates more value than the other charges lower prices than the other

creates more value than the other

Value ______ is the difference between what a customer is willing to pay for a product/service and how much it costs the firm to offer the product/service. In contrast, value ______ is the difference between what the firm ultimately charges for the product/service and how much it costs the firm to offer the product/service. Multiple choice question. creation; capture basis; added proposition; chain

creation; capture Reason: Correct. Value creation is the difference between what a customer is willing to pay for a product/service and how much it costs the firm to offer the product/service. Value capture is the difference between what the firm ultimately charges for the product/service and how much it costs the firm to offer the product/service.

Obtaining increased revenue across business units by selling products to each other's customers is known as ______. Multiple choice question. related diversification corporate strategy cross-selling

cross-selling

Some advantages of SWOT analysis are that it helps managers to ______. (Select all that apply.) Multiple select question. determine what barriers exist to meeting company objectives describe competitive and other threats to the organization brainstorm alternative courses of action differentiate entries based on their overall importance to the firm's operations be objective when analyzing the risks of potential decisions

determine what barriers exist to meeting company objectives describe competitive and other threats to the organization brainstorm alternative courses of action

Product ______ occurs when products have unique attributes that customers value. Multiple choice question. advantage differentiation commoditization

differentiation

Resources and capabilities that are ______ allow the firm to offer something that competitors can't understand how to offer. Multiple choice question. rare difficult to imitate valuable

difficult to imitate

When industry growth slows, rivalry among firms ______. Multiple choice question. stays the same due to stabilization of market factors decreases due to firms' ability to acquire new customers in the market increases because firms try to win new customers from competitors

increases because firms try to win new customers from competitors

A situation in which there are many companies competing in an industry with no dominant competitors is known as ______. Multiple choice question. industry fragmentation industry concentration product commoditization

industry fragmentation Reason: Correct. Industry fragmentation is defined as a situation in which there are many companies competing in an industry with no dominant competitors.

Some limitations of SWOT analysis are that it ______. (Select all that apply.) Multiple select question. is subjective and doesn't provide for a quantitative analysis of the benefits, costs, or risks of a decision might result in "laundry lists" not differentiated by their importance to the firm's operations is not very rigorous and therefore does not allow managers to delve deeply and thoroughly into the economics of their industries cannot assist with describing competitive and other threats to the organization doesn't help managers determine what barriers exist to meeting company objectivesis subjective and doesn't provide for a quantitative analysis of the benefits, costs, or risks of a decision might result in "laundry lists" not differentiated by their importance to the firm's operations is not very rigorous and therefore does not allow managers to delve deeply and thoroughly into the economics of their industries

is subjective and doesn't provide for a quantitative analysis of the benefits, costs, or risks of a decision might result in "laundry lists" not differentiated by their importance to the firm's operations is not very rigorous and therefore does not allow managers to delve deeply and thoroughly into the economics of their industries

Cross-selling is defined as ______. Multiple choice question. expansion into businesses with common products, technologies, or processes management of a multi-business firm and decisions that change a company's boundaries obtaining increased revenue across business units by selling products to each other's customers

obtaining increased revenue across business units by selling products to each other's customers

Something that oligopoly and monopoly have in common is that they both ______. Multiple choice question. are a product of high industry fragmentation happen when threat of substitutes is high occur in concentrated industries

occur in concentrated industries

Product differentiation is defined as ______. Multiple choice question. products with unique attributes that customers value the ability to incur lower expenses than those of competitors the fall in unit costs with higher levels of output due to spreading fixed costs over greater amounts of output

products with unique attributes that customers value

The resource that is most likely to create a sustained competitive advantage is one that is ______. Multiple choice question. rare and difficult for competitors to copy easy to imitate but valuable valuable and rare

rare and difficult for competitors to copy

Expansion into businesses with common products, technologies, or processes is the definition of ______ diversification. Multiple choice question. minimized unrelated related

related

Substitutes ______ other products, while complements ______ other products. Multiple choice question. supply; threaten replace; supplement detract from ; compete with enhance; outperform

replace; supplement

Obtaining cost efficiencies by sharing activities across businesses is the definition of ______ economies. Multiple choice question. scope scale learning

scope

Scope economies are defined as obtaining cost efficiencies by ______. Multiple choice question. spreading fixed costs over greater amounts of output sharing activities across businesses gaining more experience

sharing activities across businesses

The goal of industry analysis is to ascertain why ______. Multiple choice question. some industries are more attractive than others strengths and weaknesses occur for a particular firm value capture is higher than value creation

some industries are more attractive than others Reason: Correct. The goal of industry analysis is to ascertain why some industries are more attractive than others.

Which of the following statements best describes how substitutes and complements are different? Multiple choice question. substitutes can take the place of existing products, while complements make existing products better substitutes refer to products, while complements refer to services substitutes are inexpensive to develop, while complements are cost prohibitive to develop substitutes increase the enjoyment of a product or service, while complements increase the price of a product or service

substitutes can take the place of existing products, while complements make existing products better

The bargaining power of suppliers in an industry increases when ______. (Select all that apply.) Multiple select question. suppliers are large in relation to the size of the firms in the industry there is a limited number of supply chain vendors production inputs in the industry are mostly simple commodities

suppliers are large in relation to the size of the firms in the industry there is a limited number of supply chain vendors

The bargaining power of suppliers in an industry increases when ______. (Select all that apply.) Multiple select question. production inputs in the industry are mostly simple commodities there is a limited number of supply chain vendors suppliers are large in relation to the size of the firms in the industry

there is a limited number of supply chain vendors suppliers are large in relation to the size of the firms in the industry

The five forces framework helps to explain what determines ______. Multiple choice question. value creation value capture value proposition

value capture

The amount a customer is willing to pay is relevant in determining ______, whereas the amount a customer actually pays determines ______. Multiple choice question. customer value capture/firm value capture firm value capture/customer value capture value capture; value creation value creation; value capture

value creation; value capture Reason: Correct. The amount a customer is willing to pay is relevant in determining value creation, whereas the amount a customer actually pays determines value capture.