Mangt 595 Exam 1

Read the statements below and select the correct answer: Statement I: Strategy is a set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors. Statement II: Competitive parity occurs when a firm achieves similar performance to competitors or its industry average. Both Statement I and II are correct Neither Statement I nor II is correct Only Statement I is correct Only Statement II is correct

Both Statement I and II are correct

Which of the following answer choices is correct? Based on Porter's 5 Forces model, Diet Pepsi is considered a substitute to Diet Coke Resource based view suggests that all firms in an industry have similar resources to one another Firm competencies are considered to be the basis of competitive advantage in the resources based view L in the PESTEL acronym stands for Lucrativeness of an industry

Firm competencies are considered to be the basis of competitive advantage in the resources based view

Based on your knowledge of Porter's 5 Forces model, which of the following equations is correctly stated? High entry barriers = Reduced threat of new entrants = Higher industry profitability for incumbents Low entry barriers = Increased buyer switching costs = Lower industry profitability for incumbents Low incumbent switching costs = Increased bargaining power of suppliers = Lower industry profitability for incumbents High incumbent switching costs = Lower bargaining power of suppliers = Higher industry profitability for incumbents

High entry barriers = Reduced threat of new entrants = Higher industry profitability for incumbents

Read the statements below and select the correct answer: Statement I: Power, legitimacy, and shareholdings are the three factors that firms use to prioritize stakeholders' demands. Statement II: An executive's only responsibility is to maximize shareholder wealth at all costs. Only Statement I is correct Both Statement I and II are correct Only Statement II is correct Neither Statement I nor II is correct

Neither Statement I nor II is correct

Read the following statements and then select the CORRECT answer. Statement I: The stronger the five forces in an industry, the higher the industry's profitability potential. Statement II: During periods of high industry growth, rivalry among incumbent firms in an industry intensifies. Only Statement I is correct Only Statement II is correct Both Statement I and Statement II are correct Neither Statement I nor Statement II is correct

Neither Statement I nor Statement II is correct

There are four major incumbent firms that are competing in the wireless telecommunication industry (i.e., AT&T, Verizon, T-Mobile, and Sprint) that together hold 98.7% of the market. It can be said that the competitive structure of the wireless telecommunication industry is most similar to a(n): Perfect competition Monopolistic competition Oligopoly Monopoly None of the above

Oligopoly

Read the statements below and select the correct answer: Statement I:Upper echelons theory suggests that executives' characteristics (e.g., values, background) affect how they interpret and use information from the environment to make strategic decisions. Statement II:Business level strategy deals with the question of "where to compete?" (e.g., which industries). Neither Statement I nor II is correct Both Statement I and II are correct Only Statement I is correct Only Statement II is correct

Only Statement I is correct

Read the following statements about the Industrial/Organization Model of Competitive Advantage and then select the CORRECT answer. Statement I: RBV model assumes that firms operating in the same industry have very similar resources to one another. Statement II: RBV model assumes that firms operating in the same industry can maintain resource differences for a long time, in other words, resources are not highly mobile in an industry. Both Statement I and II are correct Neither Statement I nor Statement II is correct Only Statement I is correct Read the following statements about the Industrial/Organization Model of Competitive Advantage and then select the CORRECT answer. Statement I: RBV model assumes that firms operating in the same industry have very similar resources to one another. Statement II: RBV model assumes that firms operating in the same industry can maintain resource differences for a long time, in other words, resources are not highly mobile in an industry. Both Statement I and II are correct Neither Statement I nor Statement II is correct Only Statement I is correct Only Statement II is correct

Only Statement II is correct

Read the following statements and then select the CORRECT answer. Statement I: Competitive rivalry is strongest between firms that are located in different strategic groups. Statement II: Strategic groups help explain why a group of firms may be more profitable than another group of firms in the same industry. Only Statement I is correct Only Statement II is correct Both Statements I and II are correct Neither Statement I nor Statement II is correct

Only Statement II is correct

Read the following two statements and then select the correct answer: Statement I: Tangible resources are more likely than intangible resources to be the source of a firm's competitive advantage. Statement II: The resource-based view assumes that bundles of resources, capabilities, and competencies differ across firms. Only Statement I is correct Only Statement II is correct Both Statement I and Statement II are correct Neither Statement I nor Statement II is correct

Only Statement II is correct

_____ describes a process in which the options one faces in a current situation are limited by decisions made in the past. Social complexity Path dependence Causal ambiguity Direct imitation

Path dependence

Jon is considering providing substantial funding to a new startup company called Ampére located in Spain. The company is planning to begin producing electric vehicles that are equipped with fully autonomous driving technology in two years. Jon is concerned that customers in Spain are not receptive to fully autonomous cars as recent country-wide research shows that the company ranks 17th (out of 20 countries surveyed) on the autonomous vehicle readiness index. Customers in Spain do not seem to be willing to adopt these technologies yet. Which of the following PESTEL dimensions should Jon most closely follow in order to assess whether customers' attitudes towards autonomous technologies will begin to change in the near future? Technological Economic Sociocultural Ecological Legal

Sociocultural

Joan is considering moving away from Apple's ecosystem (e.g., iPhone, Mac, etc.) and becoming a member of the Google ecosystem (Pixel Phone, Chromebook, etc.). After conducting some research, she finds that she cannot text her family members and friends for free as most of them are using iPhones. She is also disappointed that she can no longer play her favorite U2 albums, which she had purchased on iTunes (Apple's multimedia platform) over the years. Joan also does not know how to operate an Android-based phone, which means she will have to spend a lot of time to understand Google's mobile operating system. While she does not have an emotional connection to Apple, she realizes that last year the company had sent her a $100 gift-card for being a valued customer since 2010 - a gift card that she has not used yet. For the reasons listed above, Joan decides to stay in the Apple ecosystem. It can be said that her decision was mainly influenced by high ____________. Switching costs Brand loyalty Backward integration Forward integration None of the above

Switching costs

Why is it difficult to imitate the organizational culture of firms like Southwest Airlines and Zappos? Their culture is built on socially complex relationships with their employees, customers, and suppliers. They produce products that cannot be copied easily because of their complex designs. It is impossible for competitors to hire employees that once worked for Southwest Airlines or Zappos. Organizational culture is not a valuable resource, so firms generally do not care to develop one.

Their culture is built on socially complex relationships with their employees, customers, and suppliers.

A firm's ability to recognize environmental change and use this information to redeploy its existing resources in other industries suggests that the firm has dynamic capabilities. True False

True

Managers evaluate a firm's external and internal environment in detail primarily in the ________ stage of the strategic management process. control implementation formulation analysis

analysis

An increase in the __________________ in the passenger airlines industry (e.g., American Airlines) means that aircraft manufacturers, such as Boeing, Airbus, and Lockheed Martin, will potentially reduce the profitability of the passenger airlines industry. bargaining power of buyers bargaining power of suppliers threat of substitutes threat of competitive rivalry

bargaining power of suppliers

"Thanks to retail's low margins and the high cost of robots, warehousing has been slow to embrace automation, lagging behind industries like farming and car manufacturing." At a time when retailers had not yet recognized the potential of robotics, Amazon's timely acquisition of Kiva Systems, a manufacturer of mobile robotic fulfillment systems, for $775 million in 2012 BEST illustrates the use of______________ as a mechanism to sustain the company's competitive advantage. exit barriers causal ambiguity better expectations of future resource value resource homogeneity

better expectations of future resource value

As discussed in class, Crocs' plastic molding and sandal design capabilities have provided the firm with only a temporary competitive advantage, as incumbent firms began selling sandals that were very similar to the Crocs' clogs. Crocs lost its competitive advantage primarily because of ___________ exit barriers causal ambiguity competitor imitation trade barriers

competitor imitation

Resources and capabilities that were once valuable, but stopped generating profits, and prevented a firm from updating its resource-base are known as _____________. dynamic capabilities core competencies technological discontinuities exit barriers core rigidities

core rigidities

The Organic Food Company relies on its media partner Radio Plus to regularly advertise its offers, sales, and new products. Considering that the Organic Food Company is purchasing air time on Radio Plus to advertise its offerings, it can be said that Radio Plus is one of Organic Food Company's ___________. internal stakeholders stockholders external stakeholders employees

external stakeholders

"Toyota is recalling about 2.9 million SUVs around the world because of a potential problem with seat belts. Four months ago, the automaker said it was pulling back 6.5 million cars over power window switches that can short circuit and catch fire. Toyota is also among those affected by defective airbags made by Japanese manufacturer Takata, which have resulted in more than 20 million recalls." Based on the information presented above, it can be suggested that recently publicized issues with some of Toyota's iconic products are likely to raise significant concerns among the company's ___________ stakeholders such as their customers, forcing the firm to rebuild its ______________ resources, such as its reputation. external; intangible internal; intangible internal; tangible internal; external external; tangible

external; intangible

Specialty pharmaceutical medicines are associated with high research and development costs and the process of developing such drugs is complex and time-consuming. In addition, regulatory approval is necessary before products can be introduced to the market, which further increases the business risk. Finally, patents protect incumbent firms from imitation for extended periods of time. Thus, the pharmaceutical industry specialty medicine segment is characterized by __________________________. high threat of new entrants high threat of substitutes high bargaining power of buyers high barriers to entry

high barriers to entry

Which of the following rationalizations does the following statement hint at? "Mr. Ghosn's children believe that the perks he enjoyed at Nissan should be weighed against the turnaround he led at the company and the wealth he created for others at the company over the past two decades, according to a person close to the Ghosn family." denial of victim denial of injury social weighting metaphor of ledger

metaphor of ledger

A former Wells Fargo employee realized that what she was asked to do by her managers was not ethical and after deliberation she decided to "push back and refused to meet the sales goals because, she told her managers, there was no ethical way to do it." If instead, she had said, "I do not want to lose my job over this" and proceeded to engage in fraudulent activities, at which of the following stages (Rest's ethical decision-making model) would her moral decision-making have failed? moral intent moral awareness moral judgment moral recognition

moral intent

In the 1970s, researches at the Xerox's Palo Alto Research Center (PARC) developed several breakthrough technologies, including the Graphical User Interface (GUI), which later became the standard interface for all personal computers; however, the management at Xerox's headquarters failed to gain a competitive advantage by exploiting the breakthroughs in computing software and hardware. A strategist applying the Resource-Based View to the Xerox case will realize that Xerox failed to generate revenues from its computing technologies primarily because the capability did not meet which of the following criteria? valuable rare costly to imitate casually ambiguous organized to capture value

organized to capture value

The executives at Red Couture Incorporated are developing strategic plans to address plausible future situations such as increases in synthetic fabrics by 20% versus 60%, low versus high appreciation in the value of the dollar or increases in the cost of labor by 20% versus 40%. By so doing, the company will be well prepared with its planned responses if any of these situations occurs in the future. Thus, Red Couture is using _____ as its main approach strategy formulation. strategy as planned emergence scenario planning bottom-up strategic planning top-down strategic planning

scenario planning

FindFor Inc. is an e-commerce retailer that sells a variety of merchandise. Through differentiating services like cash on delivery, easy return, and online tracking, the company has created more value for customers than its competitors (traditional, non-e-commerce businesses). Based on the information provided, it can be said that FindFor has a clear _____________ that provides the company with a competitive advantage over its competitors. set of corporate values mission vision strategic position

strategic position

A firm that only possesses resources that are valuable and rare but not costly/difficult to imitate is likely to achieve __________ in relation to its industry peers. competitive advantage competitive parity competitive disadvantage temporary competitive advantage sustained competitive advantage

temporary competitive advantage

Which of the following would be considered a powerful and legitimate stakeholder with urgent claims? A protester outside the firm's corporate office throwing eggs at the company vehicles A charity that regularly receives corporate philanthropy donations from the firm A disgruntled former employee fired because of ethical violations on the job A majority investor, holding 30% of the company's stock and threatening to sue the company

A majority investor, holding 30% of the company's stock and threatening to sue the company