Management #2 417

Which of the following has occurred in international trade over the past half-century?

Tariff rates on manufactured goods traded by advanced nations have fallen

Which of the following problems is associated with the strategy of vertical integration?

Vulnerability to unpredictable demand

Which of the following entry modes allows a company to engage in global strategic coordination?

Wholly owned subsidiaries

Mature industries are generally characterized by:

a small number of large firms.

Long-term contracts:

are a low-cost alternative to vertical integration when it is possible to build cooperative relationships with suppliers

Differentiation allows a company to

charge a premium price for its good or service

Cost reduction pressures can be particularly intense in industries producing:

commodity-type products.

Strategic alliances are

long-term agreements between two or more companies to jointly develop products that benefit all companies involved in the alliance

Outsourcing:

moves some value chain activities outside the firm

Long-term agreements between two or more companies to jointly develop new products or processes that benefit all companies that are a part of the agreement are known as:

strategic alliance.

Thomas tends to be ignorant about technological advancements. He was reluctant to own a smartphone even when they were well-established and familiar in the market. However, Thomas slowly got used to the idea of a smartphone when his job demanded him to be connected to the office network all the time. Thomas is most likely to fall under which of the following categories of customers? a. Early majority

. Laggards

A company considering entering an industry that is in the mature stage of its life cycle would generally prefer which of the following entry strategies

Acquisitions

GM typically solicits bids from global suppliers to produce a particular component and awards a !-year contract to the supplier that submits the lowest bid. At the end of the year, a contract is once again put out for bid, and once again the lowest cost supplier is most likely to win the bid. Which of the following is GM using?

Competitive bidding

Stanley's services finn wants to enter an embryonic market, but it doesn't have enough cash to purchase the required assets. Which of the following strategies would you recommend to Stanley?

DiversifY with a joint venture

Which of the following statements concerning research and development is correct?

Exploratory research and development research are needed for internal new venturing

Lucy's Swirnwear Boutique offers swirnwear that is targeted at affluent people who can afford to buy expensive, handmade swimsuits. Which of the following approaches to market segmentation is Lucy's Swimwear Boutique using?

Focus differentiation strategy

A company pursuing a strategy of vertical integration may expand its operations:

backward into an industry that produces inputs for the company's products

A company should pursue related diversification instead of unrelated diversification when the company's:

core skills are applicable to a wide variety of industrial and commercial situations

Horizontal integration in an industry tends to:

increase product differentiation.

Nick, a professional magician, is often invited to perform magic tricks at birthday parties and other social gatherings from across the country. However, he offers his services only to clients who stay in the same city as him. He is also known to charge less than other magicians in the city. Nick is pursuing which generic business strategy

Focused low-cost

Dietizza is a fast food network that makes low-calorie pizzas. As the finn wishes to expand its operations in different locations, it has licensed a few entrepreneurs to open Dietizza outlets under the company's trademark. The entrepreneurs will take up the responsibility of costs while Dietizza will assist them in running operations. The company will receive royalty payments and a percentage of profits from the entrepreneurs. Which of the following concepts is illustrated here?

Franchising

Hydralicious, a juice parlor, has been looking to expand its business. The company has given a few entrepreneurs in different locations the license to operate under its name.The entrepreneurs are given the permission to use the company's reputation and the business model to run operations. The entrepreneurs will be charged a fee but will also get a percentage of the profits made. Which of the following strategies is Hydralicious most likely to be using ?

Franchising

Rachel, a new morn, is shopping for baby products. She notices that one of the manufacturers, Lucy's, is offering a wide range of products such as baby shampoo, baby lotion, and baby wipes, together, as one combined product. Which of the following concepts is illustrated in the scenario?

Product bundling

When one or more components of a company's value chain are applicable to a wide variety of industrial and commercial situations, which of the following strategies should a company pursue?

Related diversification

Which diversification strategy is based on the idea that the company creates value by applying the distinctive competencies it developed in one line of business to another business activity?

Related diversification

Which entry mode gives a multinational the tightest control over foreign operations?

Setting up a wholly owned subsidiary

A company that follows the strategy customizes its offering to a particular niche in order to outsell its rivals.

focused differentiation

Which of the following generic competitive strategies is a producer of commodity steel most likely to pursue?

. Broad low-cost

Competitive intensity in a declining industry is greatest when:

. exit barriers are high.

Who among the following is most likely to fall under the category of laggards in the context of customer groups?

Allan is ignorant about the newest uses of technology and buys new products only when they become an absolute necessity

Which of the following is a benefit that fmns should expect to gain from the use of horizontal integration?

Better realization of economies of scale

Which of the following is not a necessity for a successful acquisition?

Quick completion of the acquisition

SparklingLeaves is one of the major suppliers of automobile tools to StanMotors, a leading automobile company.

credible commitment.

To be commercially successful, new products must be developed with in mind

customer requirements

Acquisitions often fail because of:

differences in corporate culture.

A differentiation strategy is based on creating a product that customers perceive as being

distinct from other available products.

Highest market demand and industry profits arise when:

early and late majority users enter the market.

A differentiated product is a product that:

provides greater reliability than rival products

If a company is to increase the probability of a new product's commercial success, the company must foster close links between

research and development (R&D) and marketing.

For a strategic alliance, fmns should seek partners that are:

willing to share costs and risks of product development.

Which of the following statements is true in the context oflocal demand conditions

A nation's companies gain competitive advantage if their domestic customers are sophisticated and demanding.

Which of the following statements is true in the context of globalization of production and markets

Globalization has significantly increased the threat of entry.

_________ is the process of acquiring or merging with industry competitors to achieve the competitive advantages.

Horizontal integration

Which of the following is an advantage of franchising?

It can help the franchisor expand his or her business rapidly

Which of the following is an advantage of franchising

It involves low development costs and risks.

Which of the following is a disadvantage of franchising

It results in the delegation of authority to franchisees and thus, the franchisor may not enjoy complete control. d. It does not provide sufficient incentive to the franchisees to run operations effectively as the franchisees are not entrepreneurs.

Which of the following is not a benefit of vertical integration?

Lowered cost structure

Most manufacturing companies begin their global expansion by

exporting.

When a company targets a certain segment or niche, and customizes its offering to the needs of that particular segment through the addition of features and functions, the company is pursuing a strategy

focus differentiation

Vertical integration can be disadvantageous when:

industry technology is changing rapidly

Info Tech, Inc. makes complex telecommunications products, such as cellular telephones. Since this company has a distinctive competency in research and development, it should try to differentiate its product through

innovation.

A fragmented industry is one composed of a

large number of small and medium-sized fmns

Nutrimax, a sports foods manufacturer, has recently expanded its operations to different countries. The company has realized that customers in different countries have different tastes and preferences. So, the company customizes its products based on the country where it's selling. In this scenario, Nutrirnax is most likely to be using strategy

localization

The globalization of production has caused fmns to

lower their cost structure.

The greater the number of business units in a company's portfolio, the it is for corporate managers to understand the complexities of each business.

more difficult

Black and Decker, Capitol One, Gillette, and Unilever are all companies that conduct business in two or more national markets. These companies are known as

multinational companies.

. Gadgetbug, an electronic gadgets company, has established itself as one of the industry leaders. The company recently has been facing some amount of competition from certain new entrants. The new entrants offer gadgets in different colors and with interesting artwork embossed. Recognizing that there is a special market for gadgets that are designed uniquely, Gadgetbug has now introduced its own range of uniquely designed gadgets. In this scenario, Gadgetbug's attempt to cater to all the different segments of customers to deter competition demonstrates:

product proliferation

Focus strategy can be defined as:

the strategy a company uses when it decides to serve a limited number of segments, or just one segment of the market.

The price that one division of a company charges another division for its products, which are the inputs the other division requires to manufacture its own products is known as

transfer pricing.

A strategy of vertical integration may be a risky strategy for a company to pursue when demand is

unpredictable.