MGMT 481 - Test 2

Rantouch will need to explain to the Federal Trade Commission how the acquisition will not result in an increase in prices for consumers.

-Because of the potential to reduce competitive intensity in an industry, government authorities such as the FTC and/or the European Commission usually must approve any large horizontal integration activity.

Explicit knowledge is shared in non-equity alliance firms.

??? B. Explicit knowledge is knowledge that cannot be codified. C. Explicit ‹nowledge is shared in non-equity alliance firms. D. Equity knowledge is acquired only through actively participating in a process.

False

A company that wants to enter a new geographic market within China or Saudi Arabia should avoid joint ventures with companies that are based in that country. Partnering with a foreign entity props up that entity's business rather than weakening it through competition.

True

A music distributor that decides to launch a proprietary music streaming service to respond to changes in music consumption trends exhibits dynamic...

a diversified discount

According to the case, conglomerates such as GE that pursue unrelated diversification often experience which is when the stock price of such highly diversified firms is valued at less than the sum of their individual business

False

Accounting, human resources, and research and development (R&D) are examples of primary activities that add value directly to the value chain.

tangible resources.

Amazon.com's network of distribution centers allow it to drastically reduce its delivery times compared to other online retailers. These distribution centers are examples of Amazon's

Vertical integration

Decisions relating to "what stages of the industry value chain to participate in" determine a firm's

related-linked diversification

Disney became the world's leading media company to a large extent by pursuing a corporate strategy of

backward vertical integration

Disney's current relationships with Pixar, Marvel Entertainment, and Maker Studios represent the implementation of which corporate strategy?

build new core competencies to create and compete in markets of the future

Disney's decision to launch two new streaming services is an example of which type of corporate diversification strategy?

resource differences between firms last for a long time.

Due to resource immobility, a critical assumption in the resource-based model of a firm, the

True

Dynamic strategic activity systems help a firm to maintain a competitive advantage for extended periods of time.

isolating mechanisms

Firms that can employ and establish are more likely to protect their competitive advantage from being copied and/or eroding

better expectations of future resource value

Hot Caffeine, a leading coffee roaster, anticipated that the prices of coffee beans from Costa Rica, where its main suppliers were located, would double in less than three years. This would significantly affect Hot Caffeine' profit margins. Thus, Hot Caffeine decided to develop a new partnership with a supplier in Indonesia. As predicted, the price of Costa Rican coffee beans increased twofold. Because the price of Indonesian coffee beans was much lower, Hot Caffeine was able to maintain its profit margins in turbulent times. Which of the following isolating mechanisms does this scenario best illustrate?

restructuring

Hottechi Inc., a large multinational conglomerate, had begun to experience declining revenues over the years. The top management at the headquarters of the company decided that it was important for the company to avoid deviating from its core competencies. Thus, a few of the company's key businesses like energy, telecommunications, and automobiles were centralized, giving the top management more control over them. Also, relatively newer businesses like beverages and food processing were divested. In this scenario, Hottechi is involved in

By lowering competitive intensity in the industry overall

How did the recent horizontal integration in the U.S. airline industry provide benefits to the surviving carriers?

the conglomerate can overcome institutional weaknesses, such as a lack of...

How does a conglomerate benefit from following an unrelated diversification strategy?

True

If two large movie-theater chains decide to merge, the result is likely a horizontal integration that creates a more favorable industry structure by decreasing competition.

Install modern manufacturing equipment to improve efficiency.

Igor's Furniture has seen its profit margins shrink over the past several years as increased competition has driven down furniture prices. You have been tasked with improving the company's margins. Which of the following approaches makes the most sense within the context of strategic activity systems?

False

In recent years strategic alliances have declined because of increasing government regulation.

the horizontal integration activity has the potential to reduce competitive intensity in an industry.

It is necessary for government authorities such as the Federal Trade Commission (FTC) and/or the European Commission to approve any large horizontal integration activity because:

product diversification

J-Texon Manufacturing is a large conglomerate that operates only in its home country. The company competes in industries like the consumer electronics, health care, hotel, airlines, education, and steel industries. Which of the following diversification strategies does this best illustrate?

Boston Consulting Group (BCG) matrix

Janet wants to restructure the portfolio of all her firm's strategic business units. Janet will more than likely employ the tool

direct imitation and substitution.

Leading guitar string producer Highly Strung Inc. has enjoyed a competitive advantage based on its proprietary coating that gives its strings a clearer sound and longer lifespan than uncoated strings. One of Highly Strung's competitors, however, has recently developed a similar coating using less expensive ingredients, which allows it to charge a lower price than Highly Strung for similar-quality strings. Highly Strung's competitive advantage is in danger due to

information asymmetry

Nina is in an interview for a sales job that requires no experience. She is trying to portray herself as a highly enthusiastic, energetic person with high-level communication and interpersonal skills. The interviewer is convinced that Rebecca should be hired as a salesperson in the company. However, in her resume, Rebecca had not mentioned her previous work

True

Not all firms are motivated by a need to grow.

Salesforce built new core competencies to protect and extend their current market position.

Salesforce is aiming at improving their current core competency situation. It will increase their sales of the software in the present.

False

Sending jobs out of the country to lower costs is known as outsourcing.

Dynamic capabilities perspective

The ______ suggest(s) that because the external environment changes, strategic leaders must choose their current and future investments carefully over time in order to best maintain their firm's competitive advantage.

relative market share and speed of market...

The boston consulting group (BCG) growth-share matrix locates a firm's individual strategic business units (SBUs)...

True

The major value drivers that managers have at their disposal include product features, customer service, and complements.

lack of trust between partners

Which of the following is a common drawback of a non-equity alliance?

False

when a firm operates at the minimum efficient scale, there is still opportunity for it to further reduce its cost per unit through economies of scale