Management Exam 1
Research shows that approximately ____ percent of a firm's profitability is explained by the industry in which it competes, whereas ____ percent is explained by the firm's characteristics and actions.
20%, 36%
The final responsibility for forming the organization's mission lies with the a.CEO. b.top-managementteam. c.employees. d.organization's stakeholders.
CEO
Who typically develops a firm's mission statement? a.onlytheCEO b.onlytop managers c.theCEOandtopmanagers d.theCEO,COO,andCFOonly
CEO and top managers
___ has become the second-largest economy in the world
China
A firm's mission tends to be enduring while its vision can change in light of changing environmental conditions
False
Alligator Enterprises has earned above-average returns since its founding five years ago. Since no other firm has challenged Alligator in its particular market niche, the firm's owners can feel secure that Alligator has established a competitive advantage.
False
Although organizational cultures vary considerably, one cannot make an objective judgement that some organizational cultures are more or less functional than others.
False
Although the fast food (or quick-service) industry is unattractive, McDonald's has earned above-average returns through product innovations, enhancing existing facilities, and buying properties outside the United States.
False
An effective vision statement will specify the market to be served.
False
Average returns are returns in excess of what an investor expects to earn from other investments with a smilier amount of risk
False
Corporate-level strategy in a diversified organization requires a common business strategy for each component business.
False
Customers, suppliers, unions, and local governments are examples of capital market stakeholders
False
Developed countries still have major advantages in access to information technology over emerging economies because of the significant cost of the infrastructure needed for computing power.
False
Economies of scale and huge advertising budgets are just as effective in the new competitive landscape as they were in the past, but they must be reinforced by strategic flexibility
False
Examples of incremental innovations include iPods, PDAs, Wi-fi, and web browser software.
False
Organization stakeholders are the firm's internal resources, capabilities, and core competencies that are used to accomplish what may at first appear to be unattainable goals in the competitive environment
False
Research shows that a greater percentage of a firm's profitability is explained by the I/O rather than the resource-based model
False
Resources are considered rare when they have no structural equivalent
False
Returns can only be measured in accounting terms such as return on assets, return on equity, or return on sales.
False
The CEO of Twin Spires, Inc., is emotionally and intellectually committed to using the resources of the firm to serve the needs of the natural gardening community by providing rare and native plants to individuals and nurseries around the US. This commitment has carried the CEO through long periods of below-average returns on investment. The perspective of the CEO of Twin Spires is consistent with the assumptions of the industrial organization (I/O) model.
False
The assumptions of the industrial organizational model and the resource-based model are contradictory. Therefore, organizational strategists must choose one or the other model as the basis for developing a strategic plan.
False
The degree to which the firm is dependent on a stakeholder group gives that stakeholder less influence.
False
The goal of strategic management is to develop a competitive advantage that is permanent.
False
The rapid rate of technological diffusion has increased the competitive benefits of patents
False
The resource-based model assumes that if firms have resources that are rare or costly to imitate, this is sufficient to form a basis for competitive advantage
False
When the firm earns lower-than-average returns, the highest priority is given to satisfying the needs of capital market stakeholders over the needs of product market and organizational shareholders.
False
Greenleaf Property Management has been earning below-average returns of the last 3 years. Which of the following statements are true? a.Greenleafwillbeabletosatisfyitsmultiplestakeholderseasilyaslongas thestakeholdersarecommittedto thestrategicmissionofthefirm. b.Greenleafwillbeabletoat leastminimally satisfy the demands of each stakeholder. c.Greenleafwillneedtoprioritizethedemandsofitsstakeholdersbasedonthepoliticalinfluenceeachwields. d.Greenleaf will not be able to minimally satisfy all stakeholders.
Greenleaf will not be able to minimally satisfy all stakeholders
An effective vision stretches and challenges people and can result in increased innovation as illustrated by Apple's CEO Steve Jobs, who was known to think bigger and differently than most people ("putting a dent in the universe")
True
An organization's willingness to tolerate or encourage unethical behavior is a reflection of its core values
True
Hourly workers on the production line of a chicken-processing plant are considered organizational stakeholders
True
Organizational mission statements typically do not include statements about profitability and earning above-average returns
True
___ is a capacity for a set of resources to perform a task or an activity in an integrative manner. a.capability b.core competence c.Sustainable competitive advantage d.Organizational intelligence
a capability
Generally speaking, product market stakeholders are satisfied when a.firm's profit margin yields the lowest returnto capital market stakeholders that is acceptable to them. b.afirm's profit margin yields an above-averagere turn to its capital market stakeholders. c.theinterestsofthefirm'sorganizationalstakeholdershavebeenmaximized. d.theinterestsof all stakeholdershavebeenatleastminimallysatisfied.
a firm's profit margin yields the lowest return to capital market stakeholders that is acceptable to them
Dissatisfied capital market stakeholders may a. sell their stock. b. tighten loan covenants. c. seek to increase their power. d. All of these options are correct.
all of these sell their stock, tighten loan covenants, seek to increase power
Which of the following statements about organizational knowledge is correct? knowledge is an intangible resource, important of knowledge is increasing, value of knowledge as a proportion of shareholder value is increasing all
all of these options are correct knowledge is an intangible resource, important of knowledge is increasing, value of knowledge as a proportion of shareholder value is increasing
McDonald's has been able to a. earn above-average returns. b. achieve strategic competitiveness. c. use the strategic management process. d. All of these options are correct
all of these options are correct earn above-average returns, achieve strategic competitiveness, use strategic management process
Firms use the five forces model to identify the _____ of the industry as measured by its ____ a.size;numberofcompetitors. b.globalization;exports. c.hypercompetition;technologydiffusion. d.attractiveness;profitability.
attractiveness; profitability
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? a. RNH has been earning below-average returns, so it has had to prioritize the demands of its various stakeholders. b. RNH has prioritized the demands of capital market stakeholders over the demands of product market stakeholders. c. RNH has earned above-average returns and so has satisfied the needs of all relevant stakeholders. d. RNH has been attempting to minimally satisfy the demands of all of its stakeholders.
b. RNH has prioritized the demands of capital market stakeholders over the demands of product market stakeholders
All of the following are assumptions of the resource-based model EXCEPT a.eachfirmisauniquecollectionof resourcesandcapabilities. b.theindustry'sstructuralcharacteristicshavelittleimpactonafirm'sperformanceovertime. c.capabilitiesarehighlymobileacrossfirms. d.differencesinresourcesandcapabilitiesarethebasisofcompetitiveadvantage.
capabilities are highly mobile across firms
Although it closed stores, changed the top management team, and sought potential buyers, none of these actions resulted in outcomes that allowed circuit city to meet the expectations of its ____ stakeholders a.productmarket b.capitalmarket c.organizational d.governmental
capital market
Before liquidating, Circuit City took several actions to try to satisfy its ___ stakeholders a.capitalmarket b.productmarket c.organizational d.governmental
capital market
Apple's iPod and iPad are examples of
disruptive technologies
New markets created by iPods, PDAs, and Wi-Fi are a result of
disruptive technologies
The primary drivers of hyper-competition are a.rising global socio-economic instability and increased inflation. b.the emergence of global economy and rapid technological change. c.increased global competition and decreased tariffs. d.increased availability of capital and increased competition.
emergence of a global economy and rapid technological change
The resource-based view of the firm a.emphasizes that its difficult to develop and sustain competitive advantagebasedon resources alone. b.argues that industryenvironment has strongerinfluenceonfirms' abilityto implement strategies successfully than does the competitor environment. c.calls forfirms to focus on homogeneous capabilities tocompete against their rivals d.suggests that vision and mission are closely linked to sustainable competitive advantage.
emphasizes that it is difficult to develop and sustain a competitive advantage based on resources alone
Organizational stakeholders include
employees
The strategic management process is set, decision making activity, process, or full set of commitments/decisions?
full set of commitments, decisions, and actions required for the firm to achieve above-average returns and strategic competitiveness
The economic interdependence among countries as reflected in the flow of goods, services, financial capital and knowledge across country borders is defined as
globalization
Globalization has led to a.lower operational efficiency as firmsmust transport rawmaterials and finished goods farther. b.increasing loyalty of customers for products made domestically. c.declining returns from investment in research and development. d.higher product quality.
higher product quality
The Chambers of Commerce of cities and towns often implore citizens to buy from local businesses. This is because the organization's role as a taxpayer is most important to ___ as stakeholders
host communities
All of the following are characteristic of the global economy EXCEPT a.theincreasingimportanceofdevelopingcountriesassourcesofrevenuegrowth. b.thefreemovementofgoods,services,people,skills,andideasacrossgeographicborders. c.theincreaseduseoftariffstoprotectindustries. d.higherlevelsofopportunitiesandchallenges.
increased use of tariffs to protect industries
Knowledge is composed of all the following EXCEPT a. insight. b. expertise. c. information. d. intelligence.
insight
The rate of technological diffusion is increasing. Which of the following was fastest in penetrating 25% of homes in the US market
internet
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. b. is an internally focused affirmation of the organization's financial, social, and ethical goals. c. is mainly intended to emotionally inspire employees and other stakeholders. d. is developed by a firm before the firm develops its vision.
is a statement of a firm's business in which it intends to compete and the customers it intends to serve
Analysis of the industry's profit pool enables strategic managers to a.predict future revenue streams forthe organization. b.predict growth in sales overthemediumto long range. c.determine whether an industry will be viablein thelongterm. d.locate the most promising areas of an industry's valuechain.
locate the promising areas of an industry's value chain
Product market stakeholders include the firm's customers, and the principal concern of this stakeholder group is a.maximizing the firm's roi b.receiving highest-quality products and services in the industry. c.obtaining reliable products at lowest possible price. d.increasingtheprofitabilityofthefirm.
obtaining the reliable products at the lowest possible price
The "liability of foreignness" is the: a.inabilityofmostU.S.managerstotrulycomprehend foreign cultures. b.political disadvantage that U.S. firms havewhen doingbusinessabroad. c.overall riskof participating outside firm's domestic country whenentering global competition. d.strongcultural preferencefor"buyinglocal,"which puts foreign firms at disadvantage when competing in U.S.market.
overall risk of participating outside a firm's domestic country when entering global competition
The CEO of Ridgeway, Inc., realizes that the company's survival depends on developing and acquiring knowledge. Which if the following actions by the CEO would be most consistent with this need? a.ensuringthatallcurrentuniqueknowledgeofthefirmisprotectedbypatents b.planningextensiveemployeetrainingandhiringeducatedandexperiencedemployees c.investinginsophisticateddatabasesinrelevantknowledgeareas d.establishingasystemoforganizationalintelligencegathering
planning extensive employee training and hiring educated and experienced employees
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.powerofeachstakeholder b.urgencyofsatisfyingeachstakeholder c.vulnerabilityoforganizationalstakeholders d.socialvalueofeachstakeholder
power of each stakeholder
To have the potential to become sources of competitive advantage, resources and capabilities must be non substitutable, valuable, and
rare, costly to imitate
Even for companies capable of succeeding in global markets, it is critical that they a. remaincommittedtoand strategically competitiveintheirdomesticmarket. b.introducemanynewproductsimmediatelyafterenteringanewmarket. c.acquirealocalcompetitorineachsignificantforeignmarket. d.developgoodnegotiatingskillsinordertotakeadvantageoflocalsuppliersintheinternational
remain committed to and strategically competitive in their domestic market
Although McDonald's is competing in an unattractive industry, it has improved its performance by focusing on product innovations and by enhancing existing facilities. This improved performance is best explained by a.globalization. b.the resource-based model. c.the I/O model. d.hypercompetition.
resource-based model
Capital market stakeholders include a.industrycompetitors. b.shareholders. c.employees. d.governmentregulators.
shareholders
In the resource-based model, which of the following factors would be considered a key to organization success? a.unique market niche b.weak competition c.economies of scale d.skilled employees
skilled employees
A firm has achieved __ when it successfully formulates and implements a value-creating strategy a.strategiccompetitiveness b.apermanentlysustainablecompetitiveadvantage c.substantialreturns d.legalandethicalcorevalues
strategic competitiveness
In order to cope with hyper-competition, firms need to develop ___ through continuous learning a.competitiveresilience b.strategicflexibility c.strategicpower d.competitivedominance
strategic flexibility
Product market stakeholders include a.suppliers. b.shareholders. c.employees. d.thefirm'schiefexecutiveofficer.
suppliers
Essentially, ___ has become one of the world's largest markets with 700 million potential consumers EU, US, China, Japan
the EU
The I/O model argues that a.thekeyfactorinsuccessis choosingthecorrectindustryinwhichto compete. b.thefirm'sinternalresourcesandcapabilitiesrepresentthefoundationfordevelopmentof avalue-creatingstrategy. c.thekeytoearningabove-averagereturnsisstrategicflexibility. d.theinternalstructureoftheorganizationmustmatchtheindustryinwhichitcompetesinordertoearn above-averagereturnsoninvestment.
the key factor in success is choosing the correct industry in which to compete
Which of the following statements is most consistent under the I/O view? Performance of the firm is most directly attributable to a.thepowerofthefinancialmarketstakeholders. b.theresourcesthefirmpossesses. c.theprofitabilityoftheindustryinwhichthefirmcompetes. d.hypercompetitionwithintheindustry.
the profitability of the industry in which the firm competes
The profit pool is the a. pool of assets that is distributed to investors. b. total profits earned in an industry along all points of the value chain. c. profits that are accrued when a firm earns above-average returns. d. total profits that can be divided among the competitors within an industry.
total profits earned in an industry along all points of value chain
The Princeton Alliance Church states in its website that "PAC exists to help you live life to the fullest by knowing God, developing community and bringing hope" This pronouncement is a statement of the organization's
vision
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
vision!
All of the following are resources of an organization EXCEPT a.anhourlyproductionemployee'sabilitytocatchsubtlequalitydefectsinproducts. b.oildrillingrightsinapromisingregion. c.weakcompetitorsintheindustry. d.acharity'sendowmentof$400million.
weak competitors in the industry
the __ are those with potential to be formed into core competencies as the foundation for creating value "most" knowledge resources "most" capabilities "right" resources "dark side" resources
"right" resources
Every firm uses all levels of strategy: corporate, acquisition and restructuring, international and cooperative.
False
Generally, the stronger the competitive forces, the higher the profit potential of an industry.
False
Global focusing is often used by firms with high levels of international operations who further increase their internationalization by focusing on global niche markets
False
In recent times, businesspeople have become more confident in the ability of economists to provide valid, reliable predictions about the world's economic environment
False
Interpersonal relationships, trust, friendships, and a firm's reputation are all examples of complex social phenomena that make capabilities easy to imitate
False
Monitoring involves the development of a forecast of what might happen at a future point in time.
False
Scanning involves detecting meaning through early signals of environmental trends.
False
Southwest Airlines' tightly integrated activities make its cost leadership strategy more vulnerable to imitation than if its activities were loosely integrated
False
Strategic groups are firms in different industries following similar/same stategies
False
The key to Southwest Airlines' success has been its ability to continuously reduce costs while providing customers with superior levels of differentiation such as an engaging culture. a. True b. False
False
The more distant strategic groups are in terms of their strategies, the greater the likelihood of rivalry between the groups
False
The need to meet quarterly earnings results causes managers to accurately examine the firm's internal organization.
False
The strengths of the five competitive forces are similar across strategic groups within an industry.
False
Valuable capabilities allow the firm to exploit strengths or neutralize weaknesses in the internal environment
False
Value is measured by the variable and fixed costs associated with the production and marketing of a particular product compared with the revenue and profits the product generates.
False
Walmart's change in strategy to attract more upscale customers will likely succeed because cost leaders are good at differentiating. a. True b. False
False
When Phillip Morris International studies the cigarette tax policies of various nations, it engaged in the forecasting comments of the environmental analysis process
False
An example of a government policy barrier to entry would be a situation in which the Antitrust Division of the DOJ disallows a merger because it creates a too dominant firm aka unfair competiton
True
Demographic, economic, political/legal, sociocultural, technological, global, and physical are the seven elements compromising the industry environment
True
Early adopters of new technology often achieve higher market shares and higher returns than later adopters of the technology
True
Strategic fit among the many activities in the value chain is critical for competitive advantage because it is more difficult for a competitor to match a configuration of integrated activities than to imitate a particular activity such as sales promotion or a process technology.
True
The foundation of many capabilities lies in the unique skills and knowledge of a firm's employees
True
The firm's ____ provide the foundation for choosing one or more ___ and deciding how to implement them a.analyses;strengths b.abilities;strengths c.analyses;strategies d.abilities;strategies
analyses, strategies
In the strategic management process ASP stands for a.analyses,successes,andpurposes. b.analyses,strategies,andperformance. c.ability,strategies,andpurposes. d.ability,successes,andperformance.
analyses, strategies, and performance.
Which of the following is NOT a component of internal analysis leading to competitive advantage? a. tangible and intangible resources b. analysis of supplier power c. capabilities d. core competencies
analysis of supplier power
Capabilities a. tend to be developed through firm-wide interactions and reside in the firm as a whole. b. tend to be concentrated in the support activities of the value chain. c. tend to be concentrated in the primary activities of the value chain. d. are often developed in specific functional areas.
are often developed in specific functional areas
Effective strategic leaders a.arewillingtobebrutallyhonest. b.focusonstrategyformation. c.focusonstrategyimplementation. d.focusoninnovation.
are willing to be brutally honest
Tangible resources include a. assets that are people-dependent such as know-how b. assets that can be observed and quantified c. organizational culture d. firm's reputation
assets that can be observed and quantified
Which of the following intelligence-gathering techniques is most likely legal and ethical? hiring investigators to examine competitor's trash entering a competitor's production plant without authorization redirecting a competitors emails to one's own company attending trade show presentations given by a competitor's employees
attending competitor's trade show presentations
All of the following are aspects of the political/legal segment of the general environment EXCEPT lobby groups attitudes and value taxation laws industries chosen for deregulation
attitudes and values
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 foresight judgement effective strategic thinking decisiveness
judgement
Costly-to-imitate capabilities can emerge for all of the following reasons EXCEPT a. lack of scientific transference. b. social complexity. c. unique historical conditions. d. causal ambiguity.
lack of scientific transference
Which of the following is not a factor affecting sustainability of a competitive advantage? availability of substitutes for a firm's core competence rate at which obsolescence of the core competencies occurs b/c of environmental changes imitability of core competence length of time core competencies has existed
length of time core competencies has existed
Compared to tangible resources, intangible resources are less visible, more difficult to copy less visible, less difficult to copy more visible, more difficult to copy more visible, less difficult to copy
less visible, more difficult to copy
All competitive advantages have limited life expiration date ability to earn above-average returns indefinitely ability to lead to more competitive advantages
limited life
The environmental segments that make up the general environment typically will not include demographic factors sociocultural factors substitute product/service technological factors
substitute product or service
The threat from substitutes is high when switching costs are high substitute product's price is lower than the industry product's price quality of the substitute product is lower than the quality of the industry's product substitute product stimulates new process innovations within the industry
substitute product's price is lower than the industry product's price
"Motivating, empowering, and retaining employees" is an example of a capability that resides within the human resources functional area
True
A business level strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage in specific product markets.
True
A firm should outsource only activities where it cannot create value or where it is at a substantial disadvantage compared to competitors.
True
A flexible manufacturing system is a computer-controlled process used to produce a variety of products in moderate, flexible quantities with minimal manual intervention
True
A new generation of lunch trucks in cities such as NY, San Fran, and LA serving high-end fare such as hamburgers made from grass-fed cattle, escargot, and creme brûlée illustrate the focus cost leadership strategy
True
A risk of a focus strategy is that the needs of the customer within a narrow competitive segment may become more similar to those needs of customers in the whole market
True
A risk of the differentiation strategy is that the firm's means of differentiation may eventually not provide value for which customers are willing to pay.
True
Almost any identifiable human or organizational characteristic can be used to subdivide a market into segments that differ from one another on a given characteristic.
True
Although health care reform legislation was passed in the early part of the Obama administration, it continues to be a bone of contention for employers, employees and politicians because of its delays and increased expenses. These attitudes about health care reform make up the sociocultural segment of the general environment.
True
Although it is a cost leader, IKEA also offers differentiated features that appeal to its target customers, including its unique furniture designs, in-store playrooms for children, wheelchairs for customer use, and extended hours.
True
Analyzing the internal environment enables a firm to determine what i can do by identifying resources, capabilities, and core competencies i the internal organization
True
Any core competency has the potential to lose its value-creating ability.
True
Apple has combined some of its tangible resources (such as financial resources and research laboratories) and intangible resources (such as scientists, engineers, and organizational routines) to create a capability in R&D that creates a core competence in innovation.
True
At IBM, human capital is critical to forming and using the firm's capabilities in customer relationships, scientific and research skills, and technical skills in hardware, software, and services.
True
At Southwest Airlines, the complex interrelationship between its culture and human capital adds value for customers in ways that other airlines cannot, such as jokes on flights by attendants and cooperation between gate personnel and pilots
True
Capabilities may be costly to imitate if firms have unique and valuable organizational cultures, are causally ambiguous, and socially complex.
True
Changing consumer needs is illustrated by Starbucks' allowing consumers to have an experience rather than just a cup of coffee and to design their own drinks
True
Core competencies are capabilities that serve as a source of competitive advantage for a firm over its rivals
True
Creating customer value is the source of the firm's potential to earn above-average returns
True
Effective use of the generic business strategies allows the firm to favorably position itself relative to the five forces.
True
Exit barriers are especially low in the airline industry as aircraft are not specialized and can be easily sold to other airlines, military or individuals
True
Firms achieve strategic competitiveness and earn above-average returns by acquiring, bundling, and leveraging resources for the purpose of taking advantage of opportunities in the external environment in ways that create value for customers
True
Global competition has increased the options for consumers and has made it more imperative for firms to identify the needs of customers in order to earn above-average returns
True
Low-cost leaders usually concentrate on the value chain activities of inbound logistics and outbound logistics as a means to reduce costs
True
One criterion for a resource or capability to be a source of competitive advantage is that it must allow the firm to perform a value-creating activity that competitors cannot perform
True
PepsiCo's strategy called capital performance with a purpose links green efforts in 11 businesses to the bottom line, example of addressing concerns in physical segment of general environment
True
Profit pools allow strategic leaders to predict the outcomes of their decisions before taking efforts to implement them
True
Relative power is the most critical criterion for prioritizing the demands of stakeholders
True
Resources are the source of capabilities, some of which lead to the development of core competencies; in turn, some core competencies may lead to competitive advantage
True
Resources must be combined to form capabilities, as illustrated by Subway, which linked its fresh ingredients with several other resources, including the continual training it provides to those running firm's units as the foundation for customer service as a capability
True
Risk in terms of financial returns reflects an investor's uncertainty about economic gains or losses that will result from a particular investment
True
Six years ago, Colette Smith founded a successful catering company that specializes in providing a wide assortment of miniature cheesecakes for corporate and social events. Although Ms. Smith is no longer active in the actual production of the cheesecakes, she continues as president of the catering company. Ms. Smith could be considered a strategic leader of this firm.
True
The objective of assessing the external environment is to determine the timing and importance of the effects of environmental changes and trends on the strategic management of the firm
True
The process of competitor analysis should examine the competitor's future objectives, current strategy, assumptions and capabilities
True
The rate of growth of Internet-based applications could be affected by the possibility of Internet service providers charging users for downloading those applications.
True
The rate of technology diffusion has been steadily increasing over the last two decades
True
The recent bankruptcy filings by General Motors and Chrysler Corporation illustrate that firms cannot directly control the general environment's segments
True
The two primary drivers of hyper competition are the emergence of the global economy and technology
True
The uniqueness of a firm's resources and capabilities is the basis for a firm's strategy and determines its ability to earn above-average returns under the I/O view
True
To position itself differently from competitors, a firm must decide to either perform activities differently or to perform different activities
True
Two concerns about outsourcing are the potential loss of a firm's innovative ability and the loss of jobs within companies that decide to outsource some of their work.
True
Understanding how to leverage the firm's unique bundle of resources and capabilities is a key outcome decision makers seek when analyzing the internal organization
True
Walmart uses core competencies, such as information technology and distribution channels, to create value for its customers through its "everyday low prices."
True
Walmart's actions of becoming more upscale with the intent of taking sales away from Target provided an opening for competitors such as Amazon and Family Dollar to better compete on the basis of price and attract some of Walmart's customer. a. True b. False
True
When Delta Air Lines wants to study Continental Airlines, it must examine both Continental and its complementary, Star Alliance
True
When selecting a business level strategy, the firm determines who will be served, what customer needs will be satisfied, and how those needs will be satisfied
True
While patents may be an effective way of protecting proprietary technology in some industries such as pharmaceuticals, many firms competing in the electronics industry do not apply for patents
True
Walmart's same store sales have been declining and those of rivals Family Dollar and Amazon have been increasing. What could explain this recent change? a. Walmart was too aggressive with its low-cost position and lost customers who wanted more upscale products. b. Walmart changed its strategy to focused differentiation. c. Amazon and Family Dollar changed their strategies to attract more upscale customers. d. Walmart changed its strategy to attract more upscale customers.
Walmart changed its strategy to attract more upscale customers
Costly-to-imitate capabilities are those which other firms cannot easily develop as they have no strategic equivalent
FAlse
Flexible manufacturing systems, information networks, and TQM are 3 techniques that make it possible for firms to implement the focused differentiation strategy
FAlse
GE's brand name is a tangible source of competitive advantage for the company
FAlse
Global warming and energy consumption are aspects of the technological environment segment that firms should monitor
FAlse
Research shows that firms using a hybrid strategy often outperform firms using pure strategies
FAlse
Switching costs, access to distribution channels, economies of scale, large numbers of competing firms, and slow industry growth are some entry barriers that affect threat of new entrants to industry
FAlse
An attractive industry is one that is characterized by high entry barriers, suppliers, and buyers with strong bargaining power, low threats from substitute products, low rivalry among firms
False
An english professor spends her summers writing low-brow romance novels that sell directly to paperback. She writes under a fictional name because she is embarrassed to admit her colleagues and students how she earns the extra money for foreign vacations. The professor is correct in her concern that she is serving customer needs that are objectively inferior and bad.
False
Analyzing the internal environment enables a firm to determine what it might do by identifying what opportunities and threats exist
False
Any competitor intelligent practice that is legal is also ethical
False
At the conclusion of the internal analysis, firms must identify their opportunities and threats in resources, capabilities, and core competencies
False
Because of its focus on innovation and quality manufacturing, Total Quality Management is not useful for firms that follow a cost leadership strategy. a. True b. False
False
By themselves, resources can allow firms to create value for customers as the foundation for earning above-average returns.
False
Capabilities are usually developed separately from specific functional areas such as manufacturing, R&D, and marketing
False
Capabilities of an organization emerge spontaneously through the interaction of tangible and intangible resources.
False
Tablets had had little effect on sale of PCs in the US, PC producers have experienced significant growth
False
Technology is a critical resource for helping organizations learn how to continually innovate
False
The learning generated by making and correcting mistakes is generally unimportant to efforts to create new capabilities and core competencies
False
Which of the following is NOT an entry barrier to an industry expected competitor retaliation economies of scale customer product loyalty bargaining power of suppliers
bargaining power of suppliers
The likelihood of entry of new competitors is affected by ______ and ______. barriers to entry, expected retaliation of current organizations power of existing suppliers, buyers profitability of industry, market share of leading firm demand for product, profitability of competitors
barriers to entry expected retaliation
To provide a sustainable competitive advantage, a capability must satisfy all of the following criteria EXCEPT: be technologically innovative be hard for competing firms to duplicate be without good substitutes be valuable to customers
be technologically innovative
Product differentiation refers to the... A.ability of buyer of product to negotiate lower price B.response of incumbent firms to new entrants C.belief by customers that a product is unique D.fact that as more of a product is produced the cheaper it becomes per unit
belief by customers a product is unique
The communications industry is broadly defined as encompassing all of the following except media companies smartphone producers bookretailers entertainment companies
book retailers
A firm's core strategy is its ____ strategy. a. corporate b. business c. pricing d. international
business
All of the following describe strategies EXCEPT a. they are purposeful b. cannibalize the old strategy c. they precede the taking actions to which they apply d. they demonstrate a shared understanding firm's vision and mission
cannibalize the old strategy
All of the following are forces that create high rivalry within an industry EXCEPT numerous or equally balanced competitors high fixed costs fast industry growth high storage costs
fast industry growth
For a retail business dependent on drive-in customers, the major cost disadvantage independent of scale would be if favorable locations unavailable other competitors have proprietary product tech access to raw materials is difficult other competitors have govt subsidies
favorable locations are not available
A major reason outsourcing is effective is that a. it increases the innovative potential of the firm. b. few firms possess superior capability in all primary and support activities. c. it permits unlimited access to capital resources. d. competitors do not have access to the same external sources.
few firms posses superior capability in all primary and support activities
Which of the following is nOT an external event that reveals the dark side of core capabilities? a. new competitor finds a better way to serve firm's customers b. new technologies emerge and replace those used by firm c. firm changes its focus to a new core competence d. political or social events shift the foundation of current core capabilities
firm changes its focus to a new core competence
All of the following are tangible resources EXCEPT production equipment distribution centers firm's reputation formal reporting structures
firm's reputation
By emphasizing core competencies when formulating strategies, companies learn to compete primarily on the basis of: intangible resources primary activities firm-specific differences efficiency of production
firm-specific differences
Competitor analysis focuses on firms in direct competition firms that produce substitutes all firms companies that might enter industry
firms in direct competition
Exit barriers to a firm include all of the following except generic assets loyalty to employees governmental concern about job loss restrictive labor agreements
generic assets
New Jersey and New York have the highest state taxes and highest ratio of people moving out. This impacts __ aspect of demographic analysis age structure geographic distribution income distribution ethnic mix
geographic Distribution
The observation that China, despite a 37% surge in car sales in 2010 is expected to reach production overcapacity by 2015 and have a glut of extra cars is an aspect of __ in general environment demographic, global, physical, technological
global
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. a.political/legal b.physical c.demographic d.global
global
__ is the ability to analyze, understand, manage and internal organization in ways that are not dependent on the assumptions of a single country or culture a. strategic thinking b. global mindset c. profit pooling d. competency discovering
global mindset
The department of defense buys aircraft from US companies for national security reasons. This is an example of __ barrier cost disadvantage of scale govt policy capital requirements product differentiation
government policy
The competition within each strategic group is more intense than between less intense than between typically very low unwon factor in analysis of competitive practices with a group
more intense than between strategic groups
Compared to intangible resources, tangible resources are ______ constrained because they are ______ to leverage. less, easier less, harder more, harder more, easier
more, harder
All of the following are considered generic business-level strategies except product diversification cost leadership focused differentiation integrated cost leadership/differentiation
product diversification
Buyers are powerful when a. there is a threat of forward integration. b. they purchase a small proportion of the supplier's output. c. switching costs are low. d. the buyers' industry is fragmented.
switching costs are low
The corporate research division of Siemens files, on average, 25 patents a day. The patents are a(n) ______ resource. financial organizational physical technological
technological
Understanding how new knowledge can develop new products, processes or materials is a result of analyzing the __ segment of general environment economic, political/legal, technological, global
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: permanent sustainable temporary defensible
temporary
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.capital market stakeholders and the organizational stakeholders. b.organizational stakeholders and product market stakeholders. c.capital market stakeholders andthe product market stakeholders. d.all the stakeholders.
the capital market stakeholders and the organizational stakeholders
An interior decorator has moved his business from Los Angeles to St. Paul, Minnesota, because his spouse's company transferred her to St. Paul. The decorator is distressed because the customers in his target market have, in his words, "banal and bourgeois taste." What is the decorator's problem? a. The decorator does not understand that customer needs are neither right nor wrong, good nor bad. b. The decorator has no core competencies that will transfer to his new geographic market. c. The decorator should choose a strategy of cost-leadership in this environment. d. The decorator is highly affiliated with the new target market and understands how he can create value for it.
the decorator does not understand that customer needs are neither right nor wrong, good nor bad
A business-level strategy describes a.businesses in which company intends to compete. b..all policies and procedures used in functional departments. c.thefirm's actionsto exploit its competitive advantage over rivals. d.firm's resources,intent,andmission.
the firm's actions to exploit its competitive advantage over rivals
Today, a substantially slimmed-down Polaroid is introducing a number of new products, including GL20 Camera Glasses which have a built-in camera and LCDs. This wave of new product development is explained by a. the funds provided by a patent-infringement lawsuit won by Polaroid. b. weaker competitors in its industry. c. the learning that occurred from making earlier mistakes. d. an easing of regulations governing intellectual property protection.
the learning that occurred from making earlier mistakes
The integrated cost leadership/differentiation strategy is superior to the other business-level strategies
False
The key to achieving competitiveness, earning above-average returns, and remaining ahead of competitors in the long run is to manage current core competencies: a. in a way that uniquely bundles and leverages the firm's existing resources b. while simultaneously developing new ones c. imitate the core competencies of a successful competitor d. in order to preserve and enhance them against the firm's competitors
while simultaneously developing new ones
In the animal food products business, food-product needs of owners of companion animals pets (e.g., dogs and cats) differ from the needs for food and health-related products of those owning production animals (e.g., livestock). Which of the following aspects of managing customer relationships does this choice refer to? a. Who: Determining the Customers to Serve b. What: Determining Which Customer Needs to Satisfy c. How: Determining Core Competencies Necessary to satisfy Customer Needs d. When: Determining When to Satisfy Customer Needs
who: determining the customers to serve
When selecting a business level strategy, the firm must determine all of the following EXCEPT a. how will the customer's needs to be satisfied? b. who is the customer? c. what are the customers' needs? d. why should these customers' needs to be satisfied?
why should these customers' needs to be satisfied
The next critical technological opportunity for organizations is predicted to be: Internet multiphase interventions biological engineering wireless communications
wireless communications
The proper matching of what a firm can do with what it might do: a. balances the internal characteristics of the firms with characteristics of external environment b. overcomes the rigidity and inertia resulting from history of success c. yields insights the firm requires to select its strategy d. develops core competencies based on human knowledge
yields insight the firm requires to select its strategy
Internal analysis enables a firm to determine what the firm can do should do will do might do
can do
The challenge and difficult of making effective decisions are implied by preliminary evidence that __ of organization decisions fail 1/4 1/5 1/10 1/2
1/2
New Balance Athletic Shoes target Baby Boomers' needs for well-fitting shoes. The company is unique in that it offers a very broad range of shoe widths. A realistic potential risk New Balance runs in this focused differentiation strategy includes the possibility that: a. Baby Boomers may find that they do not need well-fitting shoes, since they will become increasingly sedentary as they age. b. A competitor may be able to better use flexible manufacturing systems to make shoes with an individualized fit. c. Athletic shoes may go out of style. d. New Balance shoes may begin to appeal to a wider market, thus losing New Balance's focus advantage.
A competitor may be able to better use flexible manufacturing systems to make shoes with an individualized fit.
___ should establish a firm's individuality and should be inspiring and relevant to all stakeholders a. strategy b.vision c.mission d.goal
A mission
Which of the following would be an example of the application of the next major technological opportunity for organizations? Boeing's dreamliner Toyota's hybrid vehicles Phillip Morris International smokeless tobacco Amazon's kindle
Amazon's kindle
Circuit Corp. 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 which is an essential differentiating feature for most of their consumer products. The costs to manufacture this component have risen sharply in recent months. Internal cost accounting estimates now indicate the company is breaking even on the manufacture of this component. Which of the following is most likely? a. Circuit will likely continue to manufacture the component, even at a loss, due to low supplier power. b. Circuit will likely continue to manufacture the component, even at a loss, due to high strategic stakes. c. Circuit will likely discontinue manufacture the component due to low strategic stakes. d. Circuit will likely discontinue manufacture the component due to high supplier stakes.
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 a.Strategicflexibility b.Continuouslearning c.Knowledge d.TheInternet
Continuous learning
Which of the following pairs of companies would be least likely to be examined together as part of competitive analysis Wendys Taco bell Sony Apple Dell Microsoft Coke and Pepsi
Dell and Microsofta
Blood banks are highly dependent on donors. In the terminology of industry analysis, which statement about donors is accurate? Blood donors are... powerful suppliers b/c critical nature of what is provide to blood bank powerful suppliers b/c concentration relative to blood bank not powerful buyers b/c switching costs to alternative inputs are low powerful buyers b/c volume of needed blood
Donors are powerful suppliers because their blood is of critical nature
A company can earn above-average returns only when the value it creates is less than the costs incurred to create that value.
False
A low-cost position in the industry is not a valuable defense against rivals when competing on the basis of price.
False
Age structure, geographic distribution, income distribution, interest rates, and process innovations are all elements of concern when studying the demographic segment of the general environment
False
Although an organization's good reputation is a valuable resource that takes years of superior marketplace competence to achieve, it is not a good basis for building a competitive advantage because it can be destroyed almost instantly by bad publicity.
False
Companies without the core competencies in their value chain activities and and support functions are still able to implement successfully a either a cost leadership or a differentiation strategy, although they cannot implement an integrated cost leadership/differentiation strategy.
False
Compared to tangible resources, intangible resources are an inferior source of core competencies
False
Competitor analysis is focused on the factors and conditions influencing an industry's profitability potential
False
Contrary to popular belief, the global segment of the external environment doesn't provide many opportunities for firms such as HJ Heinz, SAB Miller, and Citigroup, all of which recently experienced low growth and profits coming from emerging markets
False
Developing a political strategy by the newly formed General Motors would likely be ineffective as firms are generally unable to influence the political/legal environment
False
Eavesdropped is an ethical way to obtain information
False
Eavesdropping by the NSA on average Americans is ethical because it is a governmental organization instead of a for-profit company.
False
Firm should seek to continually develop new core competencies because all core competencies guarantee above average profits
False
Firms can directly control the elements of the seven segments of the general environment
False
Firms should never outsource a primary activity because of the danger of the activity being imitated by rivals.
False
Human resources and other support functions are not value-creating activities in the value chain; only the value chain activities create value
False
In general, firms can be most effective if they develop business-level strategies that will serve the needs of the "typical customer" in the industry. a. True b. False
False
Older employees are less valuable resources to firms than younger employees because the older employees have lower stocks of knowledge. Consequently, employee reductions should begin with early-retirement inducements
False
One of the benefits of the integrated cost leadership/differentiation strategy is that it is less risky than either the cost leadership or differentiation strategies.
False
The I/O (industrial organization) model assumes that the uniqueness of a firm's resources and capabilities is its main source of above-average returns.
False
The activities in the value chains of companies using focus strategies are quite different than the activities in the value chains of companies using industry-wide business strategies.
False
The best of the generic business strategies is the integrated cost leadership/differentiation strategy
False
The difference between the cost leadership and differentiation business-level strategies, and the focused cost leadership and focused differentiation strategies, is their basis for customer value
False
The differentiation strategy is effective for products that are expensive, luxury consumer goods. It is not effective for common, inexpensive products such as donuts
False
The external environment facing business stays relatively constant over time
False
The firms with the most capabilities wins.
False
The legislation introduced in the US Congress during the early tenure of the Obama administration intended to reduce the amount of work U.S. companies outsource and is an example of a potential change in the sociocultural segment of the general environment
False
The value creative activities associated with the cost leadership strategy and differentiation strategy are the same
False
The value of tangible assets, such as the firm's borrowing capacity and its physical plant, is high because these assets can be easily leveraged to derive additional value.
False
Unlike a cost leadership and a differentiation strategy, both focus strategies are less dependent on the completion of various value chain and support activities in order to compete in a superior manner. a. True b. False
False
When firms analyze the external environment, they typically have complete and unambiguous data
False
value chain activities in the value chain create value, whereas support functions generate costs
False
Three sources of flexibility in completing primary and support activities are particularly useful for firms using the integrated strategy. These are a. Flexible Manufacturing Systems, Reengineering, and Total Quality Management. b. Outsourcing, Reengineering, and Flexible Manufacturing Systems. c. Outsourcing, Total Quality Management, and Information Networks. d. Flexible Manufacturing Systems, Total Quality Management, and Information Networks.
Flexible Manufacturing Systems, Total Quality Management, and Information Networks.
Reach is an especially critical dimension for which firm? a. Google b. J.C. Penney c. Blockbuster d. Colgate-Palmolive
All of the following are examples of differentiated products EXCEPT Mont Blanc pens Caterpillar's heavy-duty earth-moving equipment GV brand at Walmart prada fashion
Great value brand at Walmart
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. a.industry;capability b.I/O;resource-based c.competition;competency d.industry;competency
I/O, resource based
Value chain activities include all of the following EXCEPT: supply chain management operations MIS distribution
MIS
Economies of scale refers to the fact that as the QOP increases, COM increases QOP increases, COM constant QOP increases, COM decreases QOP decreases, COM decreases
QOP increase, COM decrease
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: A : operations. B : research and development. C : supply-chain management. D : distribution.
R&D
An investor is considering in which of two start up companies to invest. The investor has faith in the industrial organization model of above-average returns and is using its concepts to make a decision. Both start up companies propose to manufacture health focused foods. RexRich Foods has differentiated product that costs more. Green pastures has internal. culture and commitment to healthful lifestyles. Which firm will the investor feel is most consistent with the model of industrial organization?
RexRich Foods
If Southwest Airlines employees lost their high enthusiasm and commitment to the company, a. the airline could continue without problems because its cost-leadership strategy is dependent on its efficient internal procedures. b. replacement employees could be hired from rival airlines that are laying off employees easily merged into the Southwest culture. c. there would be no impact on Southwest's profitability because Southwest's customers value the low fares rather than being "entertained" by the employees. d. Southwest would have lost one of its competitive advantages and its performance would be threatened.
Southwest would have lost one of its completive advantages and its performance would be threatened
Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy
True
Strategic leaders must have a strong strategic orientation while embracing change in the dynamic competitive landscape
True
Suppliers are powerful when the industry is dominated by a few large companies, no satisfactory substitutes, the selling industry is relatively more concentrated than the purchasing industry, switching costs are high
True
The European sovereign-debt crisis and political upheavals in Egypt, Tunisia, Libya, and Syria illustrate uncertainties in the political/legal segment of the general environment that could affect the performance of business firms
True
The competitor analysis is the final part of the external environment analysis and focuses on each company against which a firm directly competes (Coke vs Pepsi)
True
The five forces model expands the arena of competitive analysis beyond direct competitors to include buyers and suppliers who may also be a source of competition
True
The five forces model suggests that firms should target the industry with the highest potential for above-average returns and then implement either a cost-leadership strategy or a differentiation strategy
True
The generalized forms of value that goods and services provide are either low cost with acceptable features or highly differentiated features with acceptable cost
True
The hazard of getting "stuck in the middle" applies to firms using any business strategy. a. True b. False
True
The industry environment directly influences the firm and its compete actions and responses
True
The new CEO of Opacity Enterprises is determined to make the long-established firm strategically flexible. The CEO feels that the employees of the company have the ability, training, and resources to engage in continuous learning. The main obstacle the CEO must face is inertia.
True
Wholesome Pet Food has successfully specialized for 20 years in high-quality pet food made from all-natural ingredients and organically raised lamb. This brand has a strong following and is recommended by veterinarians who practice in affluent neighborhoods. Wholesome's main supplier of lamb has announced that the price for lamb will be 15 percent higher next year. a. Wholesome will probably be able to pass the cost on to its customers because they are less sensitive to price increases than the average buyer. b. Companies pursuing Wholesome's business strategy are especially vulnerable to this risk. c. If Wholesome raises its pet food prices, customers will turn to less expensive brands such as Purina. d. Wholesome probably operates on very thin margins, and a cost increase will threaten its ability to earn average returns.
Wholesome will probably able to pass the cost on to its customers b/c they are less sensitive to price increases than the average buyer
An industry is defined as firms selling same products firms selling through same distribution channels firms selling same product to same customers a group of firms producing products that are close substitutes
a group of firms producing products that are close substitutes
Which of the following would NOT be identified in an analysis of the economic portion of the general environment? A.willingness of Chysler's buyers to purchase large vehicles in light of an increase in oil prices B.ability of Ford to issue new debt in light of its recent financial performance C.ability of BMW's buyers to finance car purchases in light of a change in interest rates D.willingness of GM buyers to purchase new vehicles in light of the threat of recession
ability of Ford to issue new debt in light of its recent financial performance
A cost leadership strategy provides goods or services with features that are acceptable unique substandard mediocre
acceptable
DWK Foods has developed a line of cookies and candies sweetened with organic honey. some other internet, some retail. Main barrier to entry is govt. licensing and permits access to distribution channels consumers switching costs cost disadvantages independent of scale
access to distribution channels
Value chain activities are: activities most likely imitated by competitors activities the firm completes in order to product products then sell and distribute to create value core competencies of organization activities most crucial to implementing business strategy
activities the firm completes in order to product products then sell and distribute to create value for customers
By examining the ____ of Southwest Airlines, one can identify the strategic themes around which it has developed its business strategy. These themes include limited passenger service, high aircraft utilization, highly productive ground and gate crews, and so forth. a. activity map b. profit pool c. value diagram d. five forces model
activity map
Viewing the world through the customer's eyes and constantly seeking ways to create more value for the company enhances a. the reach of the company toward the customer. b. the ability to identify the customer. c. the richness of the relationship with the customer. d. affiliation with the customer.
affiliation with the customer
Successful strategic leaders are... committed to helping the firm create value for all stakeholder groups, committed to nurturing those around them, decisive
all of these committed to helping the firm create value for all stakeholder groups, committed to nurturing those around them, decisive
Managers must adopt a new mind-set that values ___ and the challenges that evolve from constantly changing conditions a.flexibility b.innovation c.speed
all of these flexibility, innovation, speed
Organizational culture refers to social energy that drives or fails to drive organizaition, complex values and ideologies, what one does when no one is looking
all of these social energy that drives or fails to drive organizaition, complex values and ideologies, what one does when no one is looking
Valuable capabilities a. allow the firm to exploit opportunities in its external environment. b. allow the firm to neutralize threats in its internal environment. c. allow the firm to exploit opportunities or neutralize threats in its external environment. d. allow the firm to neutralize opportunities in its internal environment.
allow the firm to exploit opportunities or neutralize threats in its external environment
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 b. gains the loyalty of shareholders c. increases human intellectual capacity d. allows for superior bundling of resources
allows a firm to build a strong reputation
A decision that results in failure a. is a career-ending event because it is so unusual. b. often results from lack of accountability. c. fosters organizational inertia. d. allows for learning.
allows for learning
The strategic leader's work is characterized by a.ambiguous decision situations which make effective decisions difficultto determine. b.a willingness tounify stakeholdersthrough skillful manipulation. c.an abilitytoidentifythecorrectsolutions to long-rangeproblems. d.concentration on thepracticalday-to-day aspects of the organization's operations.
ambitious decision situations which make effective decisions difficult to determine
In smaller, new venture firms, returns are sometimes measured in terms of a.return onassets. b.return onequity. c.return onsales. d.theamount and speed of growth.
amount and speed of growth
Which of the following represents a competitive intelligence practical that is legal and ethical hire competitor employee and ask to share contacts from old company an exec attends a trade show to listen to a competitors pitch and ask questions about the product city council member shares information with his wife, a competitor marketing manager at Smith-Phillips Inc sells confidential plans
an exec attends a trade show to listen to a competitors pitch and ask questions about the product
The ability to effectively and efficiently access and use information is a.vitally importantatthepointwhere domestic firm entersthe globalmarket. b.important sourceof competitiveadvantage in virtually all industries. c.minimum required for survival in virtually any industry. d.critically important mainly in high technology industries.
an important source of competitive advantage in virtually all industries
Which of the following is a true statement about capabilities? a. are often developed in specific functional areas such as manufacturing, R&D, and marketing b. valuable capabilities are based almost entirely on tangible resources c. capabilities based on human capital are more vulnerable to obsolescence than there intangible capabilities because of tendency for employee knowledge to become outdated d. link between firm financial performance and capabilities is dependent on whether the capabilities are based on tangible or intangible resources
are often developed in specific functional areas such as manufacturing, R&D, and marketing
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 in a city of 100,000 people? average age of population in his community is high level of unemployment is high chiropractor and two independent physical therapists are in the community average education level in population is low
average age of the population is high
Strategic delegation helps a. overload middle managers. b. executives control strategy implementation. c. avoid too much managerial hubris. d. emphasize profit maximization
avoid too much managerial hubris
A competitive advantage a.canbepermanentifthefirmhassuccessfullyimplementedthestrategicmanagementprocess. b. entails reducing investors' risk to near zero. c.canbeidentifiedonlyifithasbeenunsuccessfullychallengedbycompetitors. d.exists when competingfirmsareunabletofindinvestors.
can be identified only if it has been unsuccessfully challenged by competitors
Because firms combine tangible and intangible resources to create capabilities: a. these capabilities are fragile and subject to loss of value b. capabilities are often based on developing, carrying, and exchanging information and knowledge through the firm's human capital c. capability are easily transferred from one firm to another as employees change jobs d. these types of capabilities are considered primary activities in the value chain
capabilities are often based on developing, carrying, and exchanging information and knowledge through the firm's human capital
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 impregnable casually ambiguous rationally obscure elusive
causally ambigious
The integration of a cost leadership and a differentiation strategy a. challenging because it increases the number of value-chain activities and support functions in which the firm must become component b. forces a firm to adapt more slowly to change in its environment c. allows the firm to avoid being "stuck in the middle" d. requires such a large customer base that it is most practical for firms in the global marketplace
challenging because it increases the number of value-chain activities and support functions in which the firm must become component
Characteristics of the current economic segment include all of the following EXCEPT general uncertainty clear understanding of future economic opportunities and threats inability of economists to provide valid and reliable predictions expanding economy in Vietnam
clear understanding of future economic opportunities and threats
Capabilities typically come from: A : individual resources. B : one unique resource. C : several outstanding resources used independently. D : combining resources
combining resources
The use of a differentiation strategy would be expected to be LEAST effective in which of the following markets? a. commodity goods b. motion pictures c. popular music d. writing instruments
commodity goods
Organizational stakeholders are usually satisfied when a.return on investment has beenmaximized. b.customers paythe highestsustainable priceforthegoods and servicestheyreceive. c.companies provide dynamic,stimulating,and rewarding work environment. d.companies are payingthe highest prices to suppliers.
companies provide a dynamic, stimulating, and rewarding work environment
High-level maintenance on aircraft is performed by the manufacturer. This service after the sale means that in the aircraft industry: customers are relatively weak b/c of high switching costs of frequent-flyer programs industry moving towards service differentiation competitive rivalry in industry is severe economic segment of the external environmental has shifted, but airline strategies have no changed
competitive rivalry in industry is severe
The risks of a focus strategy include a. competitor's ability to use its core competencies to outfocus the focuser by serving an even more narrowly defined segment b. competitor's ability to use its core competencies to outfocus the focuser by serving an even more broadly defined segment c. decisions by industry-wide competitors to use their resources to service a wider range of customers' needs than the focuser has been serving d. decisions by focused competitors to use their resources to serve a wider wager of customers' needs
competitor's ability to use its core competencies to outfocus the focuser by serving an even more narrowly defined segment
All of the following are ethical sources of data for external analysis EXCEPT trade shows competitor's annual reports competitor's help-wanted advertisements competitor's confidential memos
competitor's confidential memos
Applications developed for iPhones make the phone more valuable to iPhone users. App developers are Apple suppliers customers competitors complementors
complementors
A flexible manufacturing system is a. based on use of temporary and part-time employees as well as outsourcing b. computer-controlled process that its used to produce a variety of products c. based on 360 degree view of the company's relationships with customers d. system that identifies "the one best way" to product each product in company's line
computer-controlled process that its used to produce a variety of products
Acme Values, Inc., has been a successful player in the oil field industry in the last 15 years. Acme maintained its traditional strategy and product characteristics over this time period. However Acme has experienced declines in sales and profits over the fast four quarters. The CEO of Acme should a.continue with proven strategy because itsreturns overthe long run are important. b.focus on improving efficiency of production and costcontrol. c.conduct ananalysis of the external environment. d.immediately begin making incremental adjustments to traditional business strategy in effor tto improve sales.
conduct analysis of the external environment
In order to meet and exceed customers' expectations over time, firms must a. constantly manipulate customers' perceptions of their needs b. answer the questions: who, what, when, where, how, why c. continuously improve, innovate and upgrade their core competencies d. successfully defend their established core competencies from imitation by competitors
continuously improve, innovate, and upgrade their core competencies
When resources and capabilities serve as a source of competitive advantage for a firm, the firm has created a a.strategicmission. b.inspiringvision. c.corecompetence. d.sustainable market niche.
core competence
Innovation, consumer understanding, brand-building, go-to-market, and scale are activities that P&G performs well and are examples of the company's: tangible resources intangible resources core competencies capabilties
core competencies
Which of the following are central to implementing value-creating strategies and thereby satisfying customers' needs? firm resources capabilities core competencies none
core competencies
__ can be viewed as the capacity to take action strategic assets human capital core competencies functional capabilities
core competencies
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: A : the hazard of competitors being able to imitate a firms core competency. B : the need for firms to stick to their core competencies through temporary downturns in market demand. C : the lack of intangible resources undermining the core competencies of the firm. D : core competencies that have become core rigidities.
core competencies that have become core rigidities.
Charmed by Claire is a successful retail boutique, customers are greeted by name and return due to the service. Claire says she hires the best staff. Customer service is human resource organizational resource rare resource core competency
core competency
It is well known that the elected school board of a large city engages in unethical and illegal activities involving awarding major contracts. This behavior has existed for decades, even as the membership in the school board has changed over time. This behavior reflects a.core values ofthe school board as organization. b.functional,although unethical,culture of the school board. c.the lack of an organizational mission for the school board. d.aschool board lacking incore competencies.
core values of the school board as an organization
Chelsea Milling Company makes Jiffy packaged baking mixes. It was established in 1930. It has never spent one cent on advertising, which is one reason it is able to pursue a(n) ______ strategy. a. differentiation b. focused differentiation c. integrated cost leadership/differentiation d. cost leadership
cost leadership
A river barge company can offer cheaper, although slower, per pound transportation of products to companies when compared with transportation by air, truck, or rail. The river barge company should first target customers whose companies use a. integrated cost leadership/differentiation strategy b. either of the focus strategies c. cost leadership strategy d. any of the strategies except the focused differentiation strategy
cost leadership strategy
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 this project. Which of the following statements is most likely to be true? cost of marble will be... expensive b/c bargaining power of supplier moderate b/c bargaining power of buyer moderate b/c economies of scale expensive b/c high strategic stakes involved
cost of marble will be... expensive b/c bargaining power of supplier
The highest amount a firm can charge for its products is most directly affected by expected retaliation from competitors cost of substitute products variable costs of production customers' high switching costs
cost of substitute products
Durable Ceramics, Inc., provides inexpensive ceramic tile to builders of institutional buildings such as schools, prisons, and public administration buildings. It has always competed on a cost leadership basis. Most of its products are purchased by a few commercial construction firms, so it is fairly dependent on these construction firms for selling its product. Durable Ceramic's next most-efficient competitor, Cost-Less Ceramics, Inc., earns average returns, whereas Durable earns above-average returns. The commercial construction firms are putting pressure on Durable to reduce its prices. If Durable reduces its prices below those of Cost-Less's prices, it is likely that a. both Durable and Cost-Less will devise additional ways to become more efficient in their production processes. b. Durable will be unable to absorb the lower cost, and will go out of business. c. both Cost-Less and Durable will go out of business, leaving the customers with fewer alternative sources of low-cost tile. d. Cost-Less will go out of business, and Durable will gain higher power over its customers.
cost-less will go out of business, and Durable will gain higher power over its customers
Capabilities that other firms cannot develop easily are classified as costly to imitate rare valuable non-substituable
costly to imitate
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? valuable rare costly to imitate non substitutable
costly to imitate
Southwest Airlines has a complex interrelationship between its culture and human capital adds value for customers in ways that other airlines cannot, such as jokes on flights by attendants and cooperation between gate personnel and pilots. Examples of what sustainable completive advantage? valuable rare costly to imitate non-substitutable
costly to imitate
A manufacturer of jewelry imitates the style of a popular and expensive brand using manufactured stones rather than real gemstones. This example illustrates the competitive risk of __ that threatens companies that use the differentiation strategy a. customer sensitive to price differntials b. threat by the cost leader c. customer experience d. counterfeiting
counterfeiting
Business-level strategies are concerned specifically with a. creating differences between the firm's position and its competitors b. selecting the industries in which the firm will compete c. how functional areas will organized within the firm d. how a business with multiple physical locations will operate one of those locations
creating differences between the firm's position and its competitors
In analyzing the demographic segment of the general environment, one typically examines all the following factors EXCEPT age structure ethnic mix distribution of income cultural values
cultural values
A prominent national accounting firm runs television advertisements showing an accountant working alone late in the office on a client's project while holding a rose. The message of the ad is accountants love their work. This ad seeks to convey a sense of the organization's ___ to the viewers
culture
Which of the following is TRUE? a. as customer loyalty increases, customers are more sensitive to price increases b. customer loyalty has a positive relationship with firm profitability c. customer loyalty is fragile and cannot reliably be considered a factor in firm success d. customer loyalty is of importance only to firms using the differentiation strategy
customer loyalty has a positive relationship with firm profitability
The differentiation strategy can be effective in controlling the power of rivalry with existing competitors in an industry because a. customers will seek out the lowest-cost product b. customers of nondifferentiated products are sensitive to price increases c. customers are loyal to brands that are differentiated in meaningful ways d. differentiation strategy benefits from rivalry because it forces the firm to innovate
customers are loyal to brands that are differentiated in meaningful ways
A differentiation strategy can be effective in controlling the power of substitutes in an industry b/c a. customers have low switching costs b. substitute products are lower quality c. differentiating firm can always lower prices d. customers develop brand loyalty
customers develop brand loyalty
Competitor intelligence is: illegally/legally gathered data about competitors processes and decisions strategic information using espionage data that firms gathers to understand competitors objectives/strategies illegal to gather under Sarbanes-Oxley Act
data that the firm gathers to understand competitors objectives, strategies, assumptions
Which of the following is NOT an activity used in the external environmental analysis process scanning, decrypting, monitoring, assessing
decrypting
The steps for identifying the profit pools in an industry include all of the following except a.definingtheboundariesofthepool. b.estimatingtheoverallsizeofthepool. c.definingthecompetitorsinthepool. d.estimatingthesizeofthevalue-chainactivityinthepool.
defining the competitors in the pool
If Southwest Airlines is considering the consequences of videoconferencing on business travel, it is in the profit pool analysis step known as a. defining the pool's boundaries. b. estimating the pool's overall size. c. estimating the size of the value-chain activity in the pool. d. reconciling the calculations.
defining the pool's boundaries
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 action." b.split responsibilities between theCEO and board of directorsasaresultof corporate scandalstriggered by unethical CEOs. c.re-centralize the responsibility for strategy to CEO. d.expand the strategic responsibilities to all organizational stakeholders.
delegate strategic responsibilities to employees "closer to the action"
Historically, women have paid more for dry cleaning than men. Signature Cleaners advertises "equal price" for all customers. Signature Cleaners appeals to women, which is market segmentation by ______ factors. demographic socioeconomic geographic consumption pattern
demographic
In a diversified firm, corporate-level strategy is concerned with a.operating each individual business under the corporate umbrella. b.determining how each functional department of firm will operate. c.determining in which businesses to compete and how resources will be allocated between businesses. d.coordinating vision and mission of each subsidiary firm.
determining in which businesses to compete and how resources will be allocated between businesses
A company pursuing the differentiation or focused differentiation strategy would tend to a. build economies of scale and efficient operations. b. develop and maintain cost-effective MIS operations. c. develop flexible systems that allow rapid response to customers changing needs. d. have relationships with suppliers to maintain efficient flow of supplies for operations.
develop flexible systems that allow rapid response to customers' changing needs
Several months ago, a restaurant developed a new appetizer that is a hit with customers. Many customers fo to the restaurant just for it. Preparation involves common ingredients with a high temperature and costly utilities. Competing restaurants have made their own version. Which criterion for assessing capabilities/core competencies is met? a. capability to develop something valuable b. capability to develop something that is rare c. capability to develop something that is costly to imitate d. all criteria met
develop something valuable
Which of the following is NOT a value-creating activity associated with the differentiation strategy? a. developing policies to ensure efficient hiring and retention to keep costs low and implement training to ensure high employee efficiency b. providing accurate and timely delivery of goods to customers c. ensuring receipt of high quality supplies d. developing flexible systems that allow rapid response to customers' changing needs
developing policies to ensure efficient hiring and retention to keep costs low and implement training to ensure high employee efficiency
Mercedes mass produces luxury vehicles at a premium price. It uses a(n) ______ strategy. differentiation focused differentiation integrated cost leadership/differentiation focused cost leadership
differentiation
When a firm is able to produce nonstandardized (that is, distinctive) products for customers who value differentiated features more than they value low cost, the firm is successfully implementing a. a differentiation strategy. b. a cost leadership strategy. c. an integrated cost leadership/differentiation strategy. d. a single-product strategy.
differentiation strategy
All of the following are true about the strategic decisions managers make about their firm's internal organization EXCEPT that a. directly correlated to executive compensation b. non-routine c. ethical implications d. significantly influenced the firm's ability to earn above average returns
directly correlated to executive compensation
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: distribution HR marketing manufacturing
distribution
A firm's core competencies, integrated with an understanding of the results of studying the conditions in the external environment should a. guarantee profit b. lead to a first mover advantage c. drive selection of strategies d. increase firm's market share
drive selection of strategies
Firms that achieve competitive parity can expect to: a. earn below-average returns. b. earn average returns. c. earn above-average returns. d. initially earn above-average returns, declining to average returns.
earn average returns
Competitor intelligence could ethically come from all of the following EXCEPT: court records financial reports trade show discussions eavesdropping
eavesdropping
The I/O model is grounded in: (A) anthropology. (B) psychology. (C) economics. (D) accounting.
economics
All of the following are ways that a good or service can be differentiated EXCEPT a. responsive customer service b. perceived prestige and status c. economies of scale and efficient operations d. engineering design and performance
economies of scale and efficient operations
__ is an example of a capability that is based in the functional area of distribution a. effective use of logistics management techniques b. effective control of inventories through point-of-purchase data collection c. effective organizational structure d. product and design quality
effective use of logistics management techniques
Which of the following is NOT a reputational resource? a. customer opinion that the firm's products are high quality b. employee's opinion of the firm as a terrible place to work c. suppliers' opinion that the firm pays its bills in a timely manner d. customer opinion that using the firm's products makes them attractive
employees' opinion of the firm as a terrible place to work
When firms lay off employees, they are: A : treating employees as an intangible resource. B : recognizing the reduced value of labor in the value chain. C : eroding the organizations knowledge resources. D : temporarily sacrificing a tangible asset that is easily replaced
eroding the organization's knowledge resources
If McDonald's is considering growing potatoes, the step of the profit pool analysis is the one that a.defines the pool's boundaries. b.estimates the pool's overallsize. c.estimates the size of the value-chain activity in the pool. d.reconciles the calculations.
estimates the size of the value-chain activity in the pool
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? no ethical/ legal concern ethical dilemma is not Clarissa but the client's ethical dilemma is the right of competitors not to reveal certain information example of ethical competitor intelligence obtained via eavesdropping
ethical dilemma is the right of competitors not to reveal certain information
It is important to emphasize that, primarily because they are related to how a firm interacts with its stakeholders, almost all strategic management process decisions have a.ethicaldimensions. b.localdimensions. c.politicaldimensions. d.globaldimensions.
ethical dimensions
The U.S. Hispanic market is the third-largest "Latin American" economy behind Brazil and Mexico. This impacts the ______ aspect of demographic segment analysis. age structure geographic distribution income distribution ethnic mix
ethnic mix
The three dimensions of a firm's relationship with customers include all of the following EXCEPT exclusiveness affiliation richness reach
exclusiveness
Recently, the only type of car available for Anthony to rent on a business trip was a compact, fuel-efficient Japanese import. Anthony was surprised at the comfort and performance of the car. He is in the market for a new car and had previously considered only buying another luxury SUV. Now, he is thinking about the significant cost savings he would have if he bought the compact vehicle rather than a new SUV. This is an example of the competitive risk that a. a competitor's products can convey a product's differentiated features to a customer at a significantly reduced price. b. a product imitation can cause customers to perceive that competitors offer essentially the same good. c. experience can narrow a customer's perceptions of the value of a product's differentiated features. d. brand loyalty insulates a company from rivalry with competitors.
experience can narrow a customer s perceptions of the value of a product's differentiated features
Focus strategies are a. sheltered from the risks associated with industry-wide strategies because of their niche focus. b. able to avoid global risk by focusing on niches in national or regional markets. c. faced with additional types of risks than are industry-wide strategies. d. more subject to failure than industry-wide strategies.
faced with additional types of risks than are industry-wide strategies
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: a. concentrate on maintaining Acme's current core competencies b. focus on developing Acme's future competitive advantages c. place more emphasis on tangible resources, less vulnerable to obsolescence than intangible d. recognize that core competencies derived from HR are more subject to become core rigidities than competencies based on other resource types
focus on developing Acme's future competitive advantages
A firm using a(n) __ strategy generally needs to operate "below the radar" of larger and more resource rich firms that serve the broader market. cost leadership differentiation focused integrated cost leadership/ differentiation
focused
Ikea offers young customers a selection of home furnishings featuring good design, function, and acceptable quality at low prices. Ikea is using which business-level strategy? a. cost leadership b. focused cost leadership c. differentiation d. focused differentiation
focused cost leadership
The new generation of lunch trucks serving high-end fare in cities such as NY, San Fran, LA share which of the following a business strategies? cost leadership focused differentiation integrated cost leadership/differentiation differentiation
focused differentiation
Chico's is a clothing retailer that targets middle-aged women who want stylish and appealing clothes that are suitable for the mature figure. Chico's has an extensive customer list, a frequent-buyer discount card, and frequent sales promotions to Chico's customers based on their spending levels. Chico's uses a ____ strategy. a. focused differentiation based on a buyer group b. focused differentiation based on a product line segment c. generic differentiation d. integrated cost leadership/differentiation
focused differentiation based on a buyer group
The Monteleone Company pays large fees to a highly recognizable, prestigious individual to be the spokesperson for the company's products, luxury private jets. Monteleone is probably following the a. focused cost leadership strategy b. focused differentiation strategy c. integrated cost leadership/ identification strategy d. totally quality strategy
focused differentiation strategy
The focused differentiation strategy differs from differentiation strategy in that a. focused differentiators have broader competitive scope b. value-creating activity of focused differentiators are more constrained c. focused differentiators target a narrower customer market d. there are fewer risks with the focused differentiation strategy
focused differentiators target a narrower customer market
Suppose another firm found a way to offer IKEA's customers (young buyers interested in stylish furniture at low cost) additional sources of differentiation while charging the same price or to provide the same service with the same sources of differentiation at a lower price. What category of competitive risk to a focus strategy would this be? a. An industry-wide competitor decides that the market segment served by IKEA is worth entering. b. Focusing on a more narrowly defined segment and "outfocusing" the focuser. c. The needs of the customers in this narrow segment have become more similar to those of industry-wide competitors. d. Experience can narrow customer's perceptions of value of the firm's differentiated features.
focusing on a more narrowly defined segment and "out focusing" the focuser
Because of threats and risks in the global environment, some firms choose to take a more cautious approach by: avoiding global markets altogether expanding only to developed countries focusing on global niche markets acquiring already established firms in foreign markets
focusing on global niche markets
Firms within strategic groups a. follow dissimilar strategies. b. follow similar strategies across certain dimensions. c. typically engage in greater amounts of intergroup rivalry than intragroup rivalry. d. exist almost exclusively in the manufacturing sector.
follow similar strategies across certain dimensions.
Examples of support activities include all except finance HR follow-up service MIS
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 scanning, monitoring, forecasting, assessing
forecasting
The __ environment is composed of dimensions in the broader society that can influence an industry and the firms within it general competitor sociocultural industry
general
Demographic changes include variations in income distribution. Which of the following statements is true? Firms are most interested in consumers in the top 10% of household income In general, living standards have deteriorated over time general loss in real income has been somewhat offset the by increase in dual career couples workforce diversity is making the concept of average income obsolete
general loss in real income has been somewhat offset the by increase in dual career couples
The three parts of the external environment which affect a firm's strategic actions are economic, political, legal general, industry, competitor industry, business, product local, national, global
general, industry, competitor
PGG Mining is making a strategic decision whether to shut down a coal mine in Pennsylvania. It is important to consider that the decision a.shouldbe based solelyontheresults of profit-poolmapping. b.has ethical implications fororganizational stakeholders. c.need not besocially responsible ifthefirm is makingbelow-averagereturnsfromthemine. d.Allofthesechoicesare importanttoconsider.
has ethical implications for organizational stakeholders
If a firm offers a service that is valuable, rare, and costly to imitate, but a substitute exists for the service, the firm will: achieve competitive parity competitive disadvantage temporary competitive advantage gain a sustainable competitive advantage
have a temporary competitive advantage
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: high barriers to exit high switching costs high fixed costs low levels of competitive rivalry
high barriers to exit
A product's value is created by each of the following EXCEPT a. high cost, highly differentiated features b. low cost c. highly differentiated features d. low cost, highly differentiated features
high cost, highly differentiated features
All of the following were traditional sources of competitive advantage except a. labor costs b. access to financial resources c. protected markets d. highly educated labor market
highly educated labor market
When firms use core competencies to implement value-creating strategies they are answering the "______" question. who what why how
how
The political/legal segment of an environment represents political preferences of different ethnic groups in the society technological values of different political entities in society how organizations and governments mutually try to influence each other system of regulations governments at all levels place on businesses
how organizations and governments mutually try to influence each other
In the television show Mad Men, Don Draper is in charge of the creative department at an advertisingagency. He appears to spend most of his time drinking and relaxing, but occasionally he has a flash of insight that leads to a new ad campaign. He provides which valuable intangible resource? a. trust b. ideas c. brand name d. capacity to innovate
ideas
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 believe the organization's core competencies are a. casually ambiguous b. unobservable c. imitable d. common
imitable
Samsung has core competencies in manufacturing its own components and components for other competitors, which help it to predict future innovations and bring them to market quickly. It is in direct competition with Apple in the smartphone market. Its competencies allow Samsung to ____ Apple's innovations. a. get a first-mover advantage over b. prevent c. block d. imitate
imitate
Consumers in the United States are known for their a. low income. b. impatience. c. loyalty. d. group think.
impatience
A company selling diapers knows the market is for people with young children. However, within that segment they can further divide the market by a demographic factor like a. culture. b. lifestyle. c. consumption pattern. d. income
income
An analysis of the economic segment of the external environment would include all of the following EXCEPT interest rates trade deficits or surpluses inflation rates income distribution
income distribution
Customer loyalty programs such as airline frequent-flyer miles are an attempt to decrease competitor's access to distribution channels develop a cost advantage independent of scale increase customers' switching costs overcome the perishability of the hotel "product"
increase customers' switching costs
How is consolidation among fuel providers serving airport facilities viewed in the five forces model of competition? reduction of airlines ability to benefit from economies of scale increase in switching costs b/c airlines have no choice but to use jet fuel/other oil increase in bargaining power of suppliers of a critical input increase in intensity of rivalry among airlines for scarce resources
increase in bargaining power of suppliers of a critical input
All of the following are examples of efforts by firms to address the physical segment of the general development of sustainable packaging by McDonalds reduction in carbon dioxide emissions by P&G reduction in water usage in plants by Unilever increase in hiring of women and minorities at Microsoft
increase in hiring of women and minorities at Microsoft
A nationwide chain of pet stores wishes to identify the tradeoffs that its customers are willing to make between low-cost products such as generic pet foods and differentiated features such as pick-up and delivery of pets for grooming. The best technique for this firm to learn this information would be to use a. information networks. b. a flexible manufacturing system. c. differentiation development planning. d. Enterprise Resource Planning.
information networks
By linking companies with their suppliers, distributors, and customers, ____ provide a company with flexibility. a. flexible manufacturing systems b. info networks c. TQM systems d. capabilities
information networks
The technological segment of environmental analysis includes: institutions and activities involved with creating new knowledge and translating that knowledge into new outputs determination of when machinery will need to be replaced in given firm need for new technology in order for a firm to gain a competitive advantage places where a firm's technology will allow that firm to dominate a given market
institutions and activities involved with creating new knowledge and translating that knowledge into new outputs
TQM is most helpful to firms following the business strategy. a. cost leadership b. integrated cost leadership/differentiation c. focused cost leadership d. focused differentiation
integrated cost leadership/differentiation
Target's brand promise "Expect More. Pay Less" and appeal to higher-income, fashion conscious discount shoppers illustrates the _______ strategy. cost leadership differentiation focused differentiation integrated cost leadership/differentiation
integrated cost leadership/differentiation
Zara has pioneered "cheap chic" in clothing apparel. Zara offers current and desirable fashion goods at relatively low prices. To implement the strategy, Zara uses sophisticated designers and effective means of managing costs. These are all characteristics of which business level strategy? a. cost leadership b. differentiation c. integrated cost leadership/differentiation d. stuck in the middle
integrated cost leadership/differentiation
The concepts of Guanxi, Wa, and Inhwa all convey the general idea of a. entrepreneurial risk-taking. b. interpersonal relationships. c. the value of hard work. d. personal achievement.
interpersonal relationships
__ may exist among managers making decisions as well as among those affected by the decisions certainty simplicity intraorganizational conflicts interorganizational conflicts
intraorganizational conflict
An investor is considering buying a restaurant that has been in operation for a number of years. The restaurant has highly regarded chef and long term staff that work smoothly. High quality, appealing dining and dishes. What should the investor consider when making a decision? a. investor will find that the success of this restaurant is so heavily based on human resources that is subject to inertia in future b. investor will find that the restaurant's financial statements undervalue the true value of its resources c. investor should be aware that intangible assets are difficult to leverage into additional business d. investor should search for a firm which has competitive advantages based on tangible resources
investor will find that the restaurant's financial statements undervalue the true value of its resources
Mighty Green, a residential lawn chemical manufacturer, is committed to gaining market share in its industry. Mighty Green: is likely to raise the level of competitive rivalry in the industry probably has top management who are affected by emotional barriers to exit decided that long-run above-average returns are not important will probably embark on acquisition strategy
is likely to raise the level of competitive rivalry in the industry
The analysis of the activity map of a successful company such as Southwest Airlines emphasizes how a. the organizational culture of Southwest Airlines is the key to the success of the organization. b. understanding of the profit pool in an industry indicates to companies where above-average returns can be earned. c. it is hard for rivals to match a configuration of integrated activities than to imitate a single activity. d. the primary and support activities of a successful company capture value all along the value chain.
it is hard for rivals to match a configuration of integrated activities than to imitate a single activity
A company using a narrow target market in its business strategy is a. following a cost leadership business strategy. b. focusing on a broad array of geographic markets. c. limiting the group of customer segments served. d. decreasing the number of activities on its value chain.
limiting the group of customer segments served
Strategic leaders are a.located only attheexecutivelevel. b.located in different areas and levels. c.theCEO,COO,andCFOonly. d.located at different levels,but only in the operating area of the organization.
located in different areas and levels
Research suggests that having a competitive advantage in __ creates more value in the cost leadership strategy than it does in the differentiation strategy marketing and sales technology development logistics human resource management
logistics
According to the five forces model, an attractive industry would have all of the following characteristics except low barriers to entry suppliers/buyers with little bargaining power moderate degree of rivalry among competitors few good product substitutes
low barriers to entry
Starbuck's determined that all of the following customer needs were important EXCEPT a. low price. b. the experience associated with drinking coffee, not just the coffee. c. the actual product of service (e.g., a cup of coffee), not the experience. d. allowing customer to design their own drinks.
low price
According to the five forces model, an unattractive industry would have all of the following except low economies of scale needed for firms to enter low supplier power due to commodity inputs high threat of substitute products due to a large number of low-cost alternatives high bargaining power of buyers due to low switching costs
low supplier power due to commodity inputs
Walmart went against business-level strategy and made changes to attract upscale customers. These changes had which of the following results? a. It strengthened Walmart's position against rivals such as Dollar Stores and Amazon. b. It made Walmart vulnerable to Dollar Store and Amazon. c. It attracted significant numbers of new customers. d. Family Dollar, Dollar Tree, and Dollar General all experienced losses in sales as many of their customers went to Walmart.
made Walmart vulnerable to dollar store and amazon
The critical executive skill of the current business age is the ability to a. manage technological innovation b. manage human intellect c. initiate change and overcome inertia d. coordinate tangible and intangible resources
manage human intellect
The effectiveness of any of the generic business-level strategies is contingent upon a. customer needs and competitors' strategies b. match between the opportunities and threats in its external market and strengths of its internal environment c. trends in the general consumer use and robustness of global industry economy d. firm's competitive scope and its competitive advantage
match between the opportunities and threats in its external market and strengths of its internal environment
When the costs of supplies increase in an industry, the low-cost leader a. may continue competing with rivals on the basis of product features. b. will lose customers as a result of price increases. c. will be unable to absorb higher costs because cost-leaders operate on very narrow profit margins. d. may be the only firm able to pay the higher prices and continue to earn average or above- average returns.
may be the only firm able to pay the higher prices and continue to earn average or above-average returns
The term "stuck in the middle" a. means adhering to a middle of the road strategy in the face of negative outcomes. b. indicates that the customers of the firm are willing to pay only a mid-range price for the product. c. reflects the fact that the customers of the firm have only moderate expectations regarding product quality. d. means that the firm's cost structure is not low enough to allow it to attractively price its products and that its products are not sufficiently differentiated to create value for its target customer.
means that the firm's cost structure is not low enough to allow it to attractively price its products and that its products are not sufficiently differentiated to create value for its target customer.
Aardvark Corp has 3 products. Two products together make up 2/3s of revenues and constituted 50% of company profits. Aardvark's third product makes up ⅓ of sales. With profitability far above the industry average, this product is responsible for ½ of Aardvark's profits. Which of the following statements regarding assessment of the general environment is accurate for Aardvark? monitor general environment for... a. changes that might affect revenue of products b. changes that might affect profitability of most profitable products c. changes that might affect profitability of all products d. changes that might affect revenue and profitability of all products
monitor general environment for. changes that might affect revenue and profitability of all products
The aircraft industry has been dominated by two large aircraft manufacturers Boeing and airbus, demand for major aircraft is low, aggressively compete. What effect will the conditions have on domestic airline industry? It will make the airline industry... more attractive b/c decreased supplier power less attractive b/c decreased supplier power more attractive b/c increased supplier power more attractive b/c new entrant
more attractive b/c decreased supplier power
Firms use the integrated cost leadership/differentiation strategy because: a. other firms have established unassailable market dominance with other 4 strategies b. global markets allow for much broader competitive scope c. most consumers want to pay for a low price for products with somewhat highly differentiated features d. one strategy is not enough for most large firms
most consumers want to pay for a low price for products with somewhat highly differentiated features
A cost leadership strategy targets industry's __ customers
most typical
Which of the following is NOT required for a firm to achieve strategic competitiveness and earn above-average returns from core competencies core competencies.. must be aqcuired must be bundled must be internationalized must be leveraged
must be internationalized
As the television industry has changed in the last few decades from just three major networks to a multiplicity of networks, one of the major aspects of business strategy for the newer networks is _____ than the traditional networks. broader target market narrower target market increased use of primary activities increased use if support activities
narrower target market
The economic environment refers to... nature and direction of the economy in which a firm competes or may compete economic outlook of the world provided by World Bank analysis of how environmental movement and world economy interact analysis of how new environmental regulations will effect the US economy
nature and direction of the economy in which a firm competes or may compete
Judgement is the capacity for making a successful decision when a. there are multiple decision criteria b. no obviously correct model or rule is available c. cognitive biases create barriers to rationality d. there are contradictions between the firm's vision and its implemented strategy
no obviously correct model or rule is available
Organizational culture is amorphous and changeable not easily imitable so difficult to analyze that it is ignored typically fragile in the face of change
not easily imitable
A general environmental analysis can be expected to produce all of the following EXCEPT objective answers recognition of environmental trends identification of organizational opportunities identification of organization threats
objective answers
As customers come to believe that a firm's product is unique, this allows the firm to decrease advertising expenditures customer product force other companies out of market by lowering prices obtain loyal customers
obtain loyal customers
J.C. Penney attempted the strategy ______ . But it couldn't out ______ Walmart, nor could it ______ Macy's and Target. a. of integrated cost leadership; price; compete with b. of focused differentiation; cost; differentiate between c. of cost leadership; cost; differentiate between d. of focused cost leadership; price; differentiate between
of integrated cost leadership; price; compete with
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 raise prices on washing machines to offset lost sales be vulnerable to new entrants to an attractive market suffer from intense rivalry form international manufacturers offer rebates and incentives for customers who purchase
offer rebates and incentives for customers who purchase
A company competing in a single product market has a.onecorporate-levelstrategy. b.onebusiness-levelstrategy. c.onebusiness-levelstrategyforfailure. Itshouldseektodiversify. d.onebusiness-levelstrategyandonecorporate-levelstrategy.
one business-level strategy and one corporate-level strategy.
When consumers change phone service providers they are frequently required to maintain service with the providers for a specified time period. This is an example of a A.cost to producer to exchange equipment in a facility when new tech emerges B.cost of changing firm's strategic group C.one-time cost suppliers incur when selling to a different customer D.one-time cost customers incur when buying from a different supplier
one-time cost customers incur when buying from a different supplier
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 financial organizational physical technological
organizational
Tools such as ______ help the firm focus on its core competencies as the source of its competitive advantages. marketing manufacturing outsourcing imitation
outsourcing
Which of the following is true about outsourcing? a. allows firms to be more flexible and requires minimal coordination b. allow firms to concentrate on those areas in which they can create value c. strengthens the creative and innovative functions within the firm d. effective only when it includes all support activities
outsourcing allows firms to concentrate on those areas in which they can create value
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 competitve advantage parity disadvantage neutrality
parity
The products or services that are differentiated from others have qualities that are a. perceived by the customer to add value for which they will pay a premium b. valued by the typical industry customer c. perceived as standardized by the customer d. seen as classic attributes rather than passing fads
perceived by the customer to add value for which they will pay a premium
Blind taste-tests have shown that the taste of premium-priced vodkas and inexpensive vodkas are indistinguishable even to regular drinkers of vodka. But the sales of premium vodkas are thriving. This is an example of a. the perception of perceived prestige and status as a means of differentiating a product. b. the importance of high-quality raw materials when using the differentiation strategy. c. the risk of product imitation by competitors. d. the danger counterfeiting holds for firms pursuing the differentiation strategy.
perception of perceived prestige and status as a means of differentiating a product
The culmination of the strategic management process is a.performance. b.strategyimplementation. c.strategyformulation. d.analysis.
performance
___ innovation is a term used to describe how rapidly and consistently new, information intensive technologies replace older ones a. Perpetual b. Disruptive c.Global d.Diffusion
perpetual
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. financial organizational physical technological
physical
Global warming and energy consumption are aspects of the __ segment of general environment that firms should monitor
physical
Green restaurant design, sustainable packaging, waste management, and energy efficiency are aspects of the ______________ segment of the general environment that McDonald's has sought to address (Chapter 2 Strategic Focus). a. technological b. political/legal c. global d. physical
physical
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 b.global c.technological d.sociocultural
political/legal
Ever improving levels of efficiency enhance profit margins for a cost leader. This effects which of the five forces of industry structure most directly? a. Potential entrants b. Substitutes c. Buyer power d. Supplier power
potential entrants
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? sociocultural environment demographics of the environment economy of local area power of the customers/buyers
power of customers/buyers
One popular approach to taking care of the physical environment is: producing and selling additional green products lobbying the government to reduce environmental regulations making donations to the sierra club/ other environmental organizations increasing health benefits for employees
producing and selling additional green products
The large amount of advertising by firms such as P&G and Colgate is an example of what kind of barrier to industry? access to distribution channels capital requirements economies of scale product differentiation
product differentiation
New entrants to an industry are more likely when a. it is difficult to gain access to distribution channels. b. economies of scale in the industry are high. c. product differentiation in the industry is low. d. capital requirements in the industry are high.
product differentiation in the industry is low
Value consists of a. product's proprietary characteristics and attributes for which customers are willing to pay b. product's performance characteristics and attributes for which customers are willing to pay c. product's proprietary characteristics and attributes for which customers consider paying d. product's performance characteristics and attributes for which customers consider paying
product's performance characteristics and attributes for which customers are willing to pay
The typical risks of a cost leadership strategy include a. the inability to balance high differentiation and low price. b. production and distribution processes becoming obsolete. c. excessive differentiation to the point where the customer base is too small. d. loss of customer loyalty.
production and distribution processes becoming obsolete
An entrepreneur is investigating starting a company that provides tax advice to small companies. In order to position his company differently from the existing competitors, the entrepreneur must a. analyze the reach, richness, affiliation the company must have with its customers b. provide tax advice either in a different manner or provide different kind of tax service from competitors c. offer tax advice at a price lower than the cheapest competitor d. offer tax advice at higher quality than the best competitor
provide tax advice either in a different manner or provide a different kind of tax service than competitors
Religious beliefs are an example of customer segmentation by __ factors demographic socioeconomic geographic psychological
psychological
The book The Dyslexic Advantage appeals to a market of educators, people with dyslexia, their friends, family, and coworkers. This is customer segmentation by ______ factors. demographic socioeconomic psychological consumption
psychological
Outsourcing is the a. spinning off of a value-creating activity to create a new firm b. selling of a value creating activity to the firms c. purchase of a value creating activity from an external supplier d. use of computers to obtain value-creating data from the Internet
purchase of a value-creating activity from an external supplier
One capability that can be learned from failure is when to: repeat with modification add more resources dig in quit
quit
It is increasingly difficult for a firm to develop and sustain a competitive advantage because of the effects of globalization and: A. rapid development of internet's capabilities B. extensive use of outsourcing within the borders of the US c. the decanting number of inventions and patents developed by US citizens d. simultaneous erosion of the US work ethic and education system
rapid development of the internet's capabilities
A major assumption about the strategic management process is that it is a.inspired. b.team-based. c.rational. d.inclusive.
rational
The __ dimension of relationships with customers is concerned with the firm's access and connection to customers loyalty reach richness affiliation
reach
The __ dimension of relationships with customers is particularly important for social networking sites such as Facebook and MySpace reach richness affiliation social
reach
The Obama administration sought to pursue policies that would remove US from NAFTA abolish antitrust laws increase the amount of work US companies outsource to firms in other nations reduce the amount of work US companies outsource to firms in other nations
reduce the amount of work US companies outsource to firms in other nations
Strategic leaders ___ often work long hours with ambitious decision situations a. at the top of the organization b.regardless of location in the organization c.inthefinancearea d.in the operations area
regardless of their location
The most numerous of the following organizational characteristics are resources capacities capabilities core competencies
resources
The resource-based model of the firm argues that a.all resources have potential to be the basis of sustainablecompetitive advantage. b.resources alone can be a source of sustainable competitive advantage. c.key to competitive success is the structure of the industry in which the firm competes. d.resources that are valuable,rare,costly to imitate,and non-substitutable form the basis of a firm's core competencies.
resources that are valuable, rare, costly to imitate, and non-substitutable for the basis of firm's core competencies.
All of the following are assumptions of the I/O model EXCEPT a.organizational decision makers are rational committed to acting in the firm'sbestinterests. b.resources to implement strategies are firm-specific and attached tofirmsoverthelong-term. c.theexternal environment isassumedto imposepressuresand constraints that determine the strategies that result in above-average returns. d.firms given industries,or given industry segments,are assumedto control similar strategically relevant resources.
resources to implement strategies are firm-specific and attached to firms over the long-term
______ are the source of a firm's ______, which are the source of the firm's ______. a. resources, capabilities, core competencies b.Capabilities;resources;core competencies. c.Capabilities;resources;above-average returns. d.Core competencies; resources;competitive advantage
resources, capabilities, core competencies
Once a firm has determined its competitors' future objectives, current strategy, assumptions, and strengths and weaknesses, its next step is to develop: environmental assessment marketing plan response profile task force to implement plan
response profile
Above-average returns are a. higher profits than the firm earned the previous year. b. higher profits than the industry averaged over the last 10 years. c. profits in excess of what an investor expects to earn from a historical pattern of performance of the firm. d. returns in excess of what an investor expects to earn from other investments with a similar level of risk.
returns in excess of what an investor expects to earn from other investments with a similar level of risk
Amazon has built capabilities around Internet technology and e-commerce to facilitate information exchanges with its customers in a cost effective manner. This represents which of the three service dimension? a. reach b. richness c. affiliation d. None of the these options are correct.
richness
Customer ratings of products they bought online is an example of a. loyalty. b. reach. c. richness. d. affiliation
richness
All core competencies have the potential to become rigidities stagnations inefficiencies weaknesses
rigidities
Borders had a competitive advantage in physical location. However, Amazon fundamentally changed customer buying habits, and Borders' competitive advantage became a core a. stagnation. b. rigidity. c. weakness. d. inefficiency.
rigidity
__ is an investor's uncertainty about the economic gains or losses that will result from a particular investment a.Return b.Reward c.Risk d.Revenue
risk
After Amazon lowered the price on Kindle e-readers, Sony eventually lowered the price on its Reader. Sony needed to do this because same strategic group outside strategic group inter-strategic group competition strategic distinctiveness
same strategic group
The use of the Internet by Netflix to collect data on customer preferences is an example of a. assessing. b. monitoring. c. forecasting. d. scanning.
scanning
If McDonald's were to map the profit pool in the quick-service restaurant industry, it would do all of the following EXCEPT a.definetheindustry'sboundariesandsize. b.estimatetheprofitpotentialineachpartofthevaluechain. c.focusonunattractiveindustriesignoredbycompetitors. d.selectthestrategytousewherethelargestprofitpoolsarelocated.
select the strategy to use where the largest profit pools are located
When implementing a focus strategy, the firm seeks to a. offer products that are both differentiated and low cost b. move into global market c. target typical customer in an industry d. serve the specialized needs go a market segment
serve the specialize d needs of a market segment
When rival firms compete aggressively by trying to attract competitors' customers, this might be an indication of a. an industry with low exit barriers. b. increasing economies of scale. c. slow industry growth. d. high bargaining power among buyers.
slow industry growth
Firms that have strong positive relationships with suppliers and customers are said to have __, an essential ingredient to creating value customer value social capital effective marketing an attractive industry
social capital
Knowledge transfer and access to resources within the value chain are enhanced by a. guidelines for sharing knowledge and resources b. social capital c. penalties for not sharing d. knowledge and resources training employees on how to cooperate
social capital
A financial management firm has existed for more than 70 years. Some of its original client's grandchildren are now clients themselves. The staff have spent most of their career at the firm and have married into families. This firm has capabilities that would be costly to imitate because a. access to large financial capital b. causally ambitious core competencies c. social complexity d. unique historical conditions
social complexity
An analysis of society's attitudes and values would be conducted when studying the ______ segment of the general environment. sociocultural global demographic economic
sociocultural
Coca-cola and pepsico have been accused of contributing to the obesity problem of the US. This accusation comes from the __ segment of the general environment a. economic b.political/legal c. technological d.sociocultural
sociocultural
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? sociocultural segment economic segment demographic segment political/legal segment
sociocultural
Stage in the family life cycle is a ______ factor. a. demographic b. socioeconomic c. psychological d. perceptual
socioeconomic
More choices and easily accessible information about the functionality of firms' products are creating increasingly ______ customers. a. sophisticated and knowledgeable b. loyal c. dissatisfied d. content
sophisticated and knowledgeable
Business-level strategies detail commitments and actions taken to provide value to customers and gain competitive advantage by exploiting core competencies in a. selection of industries in which the firm will compete b. specific product markets c. primary value chain activities d. particular geographic location
specific product markets
Supply and demand impacts the level at which people are paid. If there are few people with a proven record of using judgement effectively then they will be in high demand and offered high compensation. CEOs are valued for their judgement as a. resource allocators b. capability counters c. strategic leaders d. core competency accumulators
strategic leaders
A __ is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage a.goal b.strategy c.tactic d.mission
strategy
All of the following are implications of strategic groups except strength of 5 forces differs across strategic groups strength of 5 forces is the same across groups competitive rivalry within s.g is greater than between closer in terms of strategies, the greater of rivalry
strength of 5 forces is the same across groups
SWOT stands for
strengths weakness opportunities and threats
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? buyers substitutes entry barriers suppliers
substitutes
Compared to tangible resources, intangible resources are a. less strategic value to firm b. less likely to be the focus of strategic analysis c. superior source of capabilities d. more likely to be reflected on firm's balance sheet
superior source of capabilities
The typical risks of a differentiation strategy do nOT include which of the following? a. customers may find differential between low-cost product and differentiated product too large b. customers' experience w/ other products may narrow customers' perception of the value of a product's differentiated features c. counterfeit goods are widely available and acceptable to customers d. suppliers of raw materials erode the firm's profit margin with price increases
suppliers of raw materials erode the firm's profit margin with price increases
Many firms outsource the payroll function of paying employees to firms such as ADP. Payroll is a(n): value chain activity operation function support function supply-chain function
support function
Strategic fit among many activities (in an activity map) is fundamental to a. the development of core competencies for a firm. b. the breadth of competitive scope for a firm. c. sustainability of a firm's competitive advantage. d. the integrity of the firm's value chain.
sustainability of a firm's competitive advantage
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? value test rareness test substitutability test costly-to-imitate, fails all 3 tests
sustainability test
The benefit of a flexible manufacturing system is that a. the lot size needed to manufacture a firm's product efficiently is reduced. b. the necessary skill levels of workers are reduced, allowing the firm to reduce costs. c. it lends itself to empowerment of employees. d. it captures the cost savings of economies of scale.
the lot size needs to manufacture a firm's product efficiently is reduced
Suppliers are powerful when: a. satisfactory substitutes are available. b. they sell a commodity product. c. they offer a credible threat of forward integration. d. they are in a highly fragmented industry.
they offer a credible threat of forward integration
A firm successfully implementing a differentiation strategy would expect a. customers to be sensitive to price increases b. to change premium prices c. customers to perceive the product as standard d. to have high levels of power over suppliers
to change premium prices
A competitor analysis includes all of the following about competitors except future objectives current strategy assumptions traditions
traditions
Firms implementing cost leadership strategies often sell no-frills standardized goods or services (but with competitive levels of differentiation) to the industry's most typical customers. a. True b. False
true
To build social capital whereby resources such as knowledge are transferred across organizations requires ______ between the parties. contract determination confidence trust
trust
Which of the following explains, in part, why rivalry among McDonald's, Wendys, Burger King is intense? low geographic saturation high differentiation threat of supplier forward integration is low trying to find ways to differentiate products
trying to find ways to differentiate products
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: certainty uncertainty intra organizational conflict inter organizational conflict
uncertainty
The three conditions that characterize difficult managerial decisions concerning resources, capabilities, and core competencies are a. complexity, rarity, human intellectual capital b. uncertainty, complexity, intra-organizational conflicts c. imitability, complexity, inter organizational conflicts d. imitability, comparability, human intellectual capital
uncertainty, complexity, intraorganizational conflicts
Value chain analysis is a tool used to a. analyze a firm's external environment for value-creating opportunities b. analyze a firm's value chain activities and support functions in isolation from its competitors' value chain c. understand the parts of the firm's operation that create value and those that do not d. identify the firm's core competencies in each of the primary activities of the firm
understand the parts of the firm's operation that create value and those that do not
Counterfeiting goods and exporting them from China is ethical legal unethical legal ethical illegal unethical illegal
unethical illegal
From a customer's point of view, for an organization's capability to be a core competence it must be inimitable and unique valuable and unique inimitable and non-substitutable valuable and non-substitutable
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 __ rare, valuable valuable, rare socially complex, rare valuable, casually ambiguous
valuable, rare
The capabilities used to create the sustainability/green initiatives at Walmart and Target are ______ but less likely to be ______. rare, valuable valuable, rare social complex, rare valuable, casually ambiguous
valuable, rare
______ is measured by a product's performance characteristics and its attributes for which customers are willing to pay. competitive advantage profit potential contribution value
value
An analysis of income distribution would include all of the following EXCEPT: purchasing power of various age groups discretionary income of various ethnic groups wage differentials between male and female employees working for a large manufacturer how income is distributed among regions of the US
wage differentials between male and female employees working for a large manufacturer
Environmental scanning would be most important for which organization? a.provider of hospice services for terminallyill b.web design company catering to smallbusinesses c.neighborhood sewer and water utility d.manufacturer of household linens
web design company catering to small business
Hyundai allows customers to return their cars if they lose their job within 12 months of purchase. Which of the following aspects of managing customer relationships is Hyundai engaged in? a. Who: Determining the Customers to Serve b. What: Determining Which Customer Needs to Satisfy c. How: Determining Core Competencies Necessary to satisfy Customer Needs d. When: Determining When to Satisfy Customer Needs
what: determining which customer needs to satisfy
Before the firm decides what products to offer and what benefits and features they will have, the firm must decide all the following questions EXCEPT a. who the firm should serve. b. when the customer's needs should be satisfied. c. what needs the firm should satisfy. d. what core competencies are needed to satisfy customer needs.
when the customer's needs should be satisfied
