MGMT 478 Test 3
When a standalone organization is created and owned by two or more parent companies together, the strategic alliance is referred to as a(n) _____.
Joint Venture
In which of the following stages of the industry life cycle is a standard first established?
Growth stage
Which of the following statements is true of a disruptive innovation?
It invades the market from the bottom up, by first capturing the low end.
_____ is best described as the process of manufacturing a large variety of tailor-made products or services at a relatively low unit cost.
Mass customization
An organization that is organized according to strategic business units (SBUs) and also along organizational structures is most likely using a _____ structure.
Matrix
_____ is best described as the output range needed to bring down the cost per unit as much as possible, allowing a firm to stake out the lowest-cost position that is achievable through economies of scale.
Minimum efficient scale
Which of the following is an example of an internal transaction cost?
The cost of maintaining a production unit
a result of horizontal integration
There is a reduction of excess capacity in the market.
Which of the following is an advantage of equity alliances when compared to non-equity alliances?
They produce stronger ties between partners.
reasons why firms enter alliances?
To strengthen competitive position To learn new capabilities To enter new markets, either in terms of geography or products and services
In a focused cost-leadership strategy, a firm:
delivers low-cost products and services to a specific, narrow part of the market.
A differentiator is least likely to be threatened by increases in input prices due to powerful suppliers when the:
differentiator is able to create a significant difference between perceived value and current market prices.
A cost-leader is protected from the threat of new entrants primarily due to its:
economies of scale.
Large companies have been shifting their knowledge landscape from closed innovation to open innovation because of the:
increasing supply and mobility of skilled workers.
In a radical innovation, a firm targets:
new markets by using new technologies.
Supply, distribution, and licensing contractual agreements between firms, which result in vertical strategic alliances, are all examples of _____.
non-equity alliances
The process of alliance management begins with _____.
selecting the best possible partner
A drawback involved in using cross-border strategic alliances to enter new foreign markets is that:
some of the firm's proprietary know-how may be appropriated by the foreign partner
The typical four-step innovation process begins with:
the presentation of an idea as findings derived from basic research.
What is the basic tenet of the crossing-the-chasm framework?
Each stage of the industry life cycle is dominated by a different customer group.
Each stage of the vertical value chain typically represents a distinct _____ in which a number of different firms are competing.
Industry
_____ is best described as a situation in which one party is more informed than another, because of the possession of private information.
Information asymmetry
_____ is best described as the commercialization of any new product, process, or the modification and recombination of existing ones.
Innovatoin
In the context of the long tail phenomenon, what does the short head represent?
Products that appeal to the largest segment of the market with homogenous tastes
_____ are best described as voluntary arrangements between firms that involve the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services to lead to competitive advantage.
Strategic alliances
Which of the following is more of a value driver than a cost driver?
Superior customer service
Why is the phase after the growth stage of the industry life cycle referred to as the shakeout stage?
The weaker firms are forced out of the industry in this stage.
When does a merger between companies typically occur?
When two firms of comparable size join to form a combined entity
Which of the following statements accurately brings out the difference between economies of scale and learning effects?
While there are no diseconomies to learning, there are diseconomies to scale.
A primary advantage of organizing economic activity within firms is the:
ability to coordinate highly complex tasks to allow for specialized division of labor
Companies that pursue related diversification are able to create a diversification premium because they:
are able to increase value due to economies of scope.
When a firm does not have the resource required for pursuing a growth strategy, and if the resource in question is not easily tradable, the implication for the strategist is most likely to:
consider an outright acquisition.
A company that uses a differentiation strategy can achieve a competitive advantage as long as its:
economic value created is greater than that of its competitors
In the Boston Consulting Group (BCG) growth-share matrix, strategic business units categorized under dogs:
hold a small market share in a low-growth market.
In a successful _____, the trade-offs between differentiation and low cost are reconciled.
integration strategy
Generally, as the level of _________ innovation declines, the level of _________ innovation increases.
product; process
_____ are best described as unique assets with high opportunity costs that have significantly more value in their intended use than in their next-best use.
specialized assets
A _____ is best described as a voluntary arrangement between firms that involves the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services.
strategic alliance
The productivity frontier function is concave, and it captures the:
trade-off between value creation and production cost
A firm follows a(n) _____ when less than 70 percent of its revenues come from a single business and there are few, if any, linkages among its businesses.
unrelated diversification strategy