MGMT 699 - Dr. Su - McNeese Spring 2022 - Test 2

The concept of a(n) ______ attempts to combine both learning effects and process improvements. a. strategic implementation b. minimum efficient scale c. experience curve d. technological innovation

c

______ are the firm's current level of tangible resources. a. Resource flows b. Dynamic capabilities c. Resource stocks d. Tangible expectations

c. Resource stocks

One of the most popular tools used by firms to evaluate their current situation and future prospects is the ______. a. dynamic capabilities perspective b. VRIO framework c. SWOT analysis d. value chain analysis

c. SWOT analysis

According to the VRIO framework, to fully exploit the competitive potential of its resources, capabilities, and competencies, a firm must ______. a. temporarily ignore its organizational design b. pay special attention to its main competitor c. be organized to capture value d. have a lot of cash on hand

c. be organized to capture value

According to the VRIO framework, a rare resource is ______ if firms that do not possess the resource are unable to develop or buy the resource at a comparable cost. a. easy to imitate b. not costly to imitate c. costly to imitate d. organized to capture value

c. costly to imitate

How to compete on a business level is defined by the variables value and cost. Together they define the ______. a. potential economic value b. the strategic fit c. economic value created d. perceived economic value

c. economic value created

Resource ______ and resource ______ are the key assumptions behind the resource-based model of the firm. a. homogeneity; immobility b. heterogeneity; mobility c. heterogeneity; immobility d. homogeneity; mobility

c. heterogeneity; immobility

A firm that manages to avoid competition entirely by offering a product or service that creates an uncontested market space is engaging in ______. a. economies of scale b. a red ocean strategy c. cost leadership d. value innovation

d

A ______ strategy attempts to create products with unique and attractive features in order to increase the price that consumers are willing to pay. a. differentiation b. premium market c. monopolistic d. cost-leadership

a

A firm's strategic profile based on value creation and cost is called its ______. a. strategic position b. strategic trade-offs c. strategic control d. strategic alliance

a

What should a firm do in order to be organized to capture value? (Check all that apply.) a. have a rare and valuable resource b. have a good organizational structure c. have CEOs with forward-thinking vision d. have good coordinating systems

a. have a rare and valuable resource b. have a good organizational structure d. have good coordinating systems

Strategic fit ______ the likelihood that a firm is able to gain a competitive advantage. a. increases b. makes impossible c. does not impact d. decreases

a. increases

In contrast to primary activities, support activities add value ______, but are necessary to sustain primary activities. a. indirectly b. informally c. spontaneously d. directly

a. indirectly

Which of the following are input factors? (Check all that apply) a. information technology services b. labor c. distribution d. capital e. raw materials f. marketing and sales

a. information technology services b. labor d. capital e. raw materials

Marketing, sales, and distribution are ______ activities in a firm's value chain. a. primary b. ambiguous c. support d.secondary

a. primary

What does the concept of resource heterogeneity imply? a. that firms all have resources that are "sticky" or hard to transfer b. that each firm has different resources c. that different firms value different things d. that each firm has the same resources

b. that each firm has different resources

A company with a cost-leadership strategy faces significant difficulties when _____. a. no valuable substitutes exist b. suppliers agree to charge less for their supplies c. the focus of competition shifts from price to non-price attributes d. the focus of competition shifts from non-price to price attributes

c

A(n) __________ strategy attempts to increase the perceived value of a product while controlling costs. a. cost-leadership b. integrated balanced approach c. differentiation d. competitive implementation

c

In order to avoid making costly mistakes due to the potential shortcomings of the SWOT analysis, a manager should ______. a. avoid using the SWOT altogether b. use the SWOT analysis only once a year c. take results from the SWOT analysis with "a grain of salt" d. use the SWOT analysis only if no other analysis is available

c. take results from the SWOT analysis with "a grain of salt"

The resource-based model views resources as ______. a. threats to competitors b. the critical assumption to resource immobility c. the main driver of firm performance d. the intangible asset

c. the main driver of firm performance

A company's goal-directed plans regarding how to compete for advantage is known as the firm's ______. a. blue ocean strategy b. industry effects c. sustainable competitive advantage d. business-level strategy

d

The SWOT analysis should be used with caution because ______. a. it is increasingly outdated in today's economy b. strengths are often viewed as weaknesses c. resource stocks are occasionally confused with resource flows d.opportunities can be threats and strengths can be weaknesses

d.opportunities can be threats and strengths can be weaknesses

Intellectual property protection and social complexity are examples of __________ mechanisms, which help a firm sustain a competitive advantage.

isolating / isolation

A manufacturer of electronic components can use its manufacturing machines to produce many different components such as semiconductors, sensors, and capacitors. In this case, the firm benefits from an economy of __________, reducing overall production costs by finding multiple uses for its components and facilities.

scope

An auto manufacturer that has access to cheaper labor and raw materials than its rivals will have a competitive advantage regarding lower cost of ______ factors. a. input b. experience-curve c. learning-curve d. scaling

a

Bundling of products and services that are consumed in tandem to create value is an example of ______. a. complements b. strategic trade-offs c. economies of scope d. premium pricing

a

For a differentiation strategy to strengthen a company's strategic position and boost its competitive advantage, ______. a. an increase in value creation must exceed the increase in costs b. any increase in costs is unacceptable c. any increase in value creation must not be more than the increase in costs d. an increase in costs must exceed the increase in value creation

a

Patti's Potato Chips is a national potato-chip manufacturer. Calpurnia's Crisps is a small-batch gourmet potato-chip maker. Based on just this information, which of the following is the greatest advantage Patti's has over Calpurnia's? a. economies of scale b. complements c. customer service d. product features

a

When pursuing a differentiation strategy, a firm can achieve a competitive advantage by ______. a. ensuring that its economic value exceeds that of its competitors b. equipping customers with generic and lower priced products c. increasing perceived value regardless of cost increases d. making sure the firm's costs are the lowest

a

Which of the following are business strategies JetBlue pursued in order to gain a competitive advantage? a. differentiation and cost-leadership b. economies of scale and differentiation c. differentiation, cost-leadership, and economies of scale d. cost-leadership and economies of scale

a

Which of the following were resources and capabilities that helped Five Guys gain a competitive advantage and develop into a successful restaurant chain? (Check all that apply.) a. Carefully choosing the supplier of the potatoes for their fries b. Preparing and freezing meat paddies at a centrally located site c. Never using the highest-priced vendor for a product d. Focusing on such details as store layout and design

a. Carefully choosing the supplier of the potatoes for their fries d. Focusing on such details as store layout and design

The VRIO framework is used to evaluate a firm's resources. VRIO is an acronym for which of the following? (Check all that apply.) a. Rare b. Imitate c. Valuable d. Original

a. Rare b. Imitate c. Valuable

Which of the following is true according to the assumption of resource heterogeneity? a. Resource bundles vary from company to company. b. Companies should focus on duplicating the resources bundles of successful firms. c. Each firm deals with a unique set of external influences. d. Firm resource differences tend to last for a long time.

a. Resource bundles vary from company to company.

______ are the firm's level of investments to maintain or build a resource. a. Resource flows b. Resource complements c. Resource value d. Resource stocks

a. Resource flows

Which of the following are situations in which a resource is considered valuable? (Check all that apply.) a. The resource helps a firm exploit an external opportunity. b. The resource is both heterogeneous and immobile. c. The resource helps the firm increase its economic value creation (V-C). d. The resource helps the firm produce tangible, not intangible competencies.

a. The resource helps a firm exploit an external opportunity. c. The resource helps the firm increase its economic value creation (V-C).

Which of the following statements are true about the capabilities of a firm? (Check all that apply.) a. They concern the deployment of resources. b. They include intellectual property. c. They include managerial skills. d. They include organizational skills.

a. They concern the deployment of resources. c. They include managerial skills. d. They include organizational skills.

A firm's network of interconnected activities is referred to a strategic activity system because activities that are interconnected are very difficult for competitors to copy effectively. a. True b. False

a. True

True or False: Tesla's high stock market valuation is partly justified by the company's learning curve. a. True b. False

a. True

True or false: According to the resource-based model, a firm is assumed to be a unique bundle of resources, capabilities, and competencies. a. True b. False

a. True

Which of the following identifies the resources that can lead to a competitive advantage? a. VRIO framework b. resource heterogeneity c. value chain d. PESTEL

a. VRIO framework

Capabilities include which of the following? (Check all that apply.) a. a company's organizational structure b. a company's routines c. a company's culture d. a company's financial statements

a. a company's organizational structure b. a company's routines c. a company's culture

The organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically are called _____. a. capabilities b. resources c. activities d. core competencies

a. capabilities

Which of the following are intangible resources that can be protected as intellectual property? (Check all that apply.) a. copyrights b. trademarks c. generic formulas d. trade secrets

a. copyrights b. trademarks d. trade secrets

A(n) ______ is a unique strength, embedded deep within a firm, that is critical to gaining and sustaining competitive advantage. a. core competency b. capability c. activity d. resource

a. core competency

For a firm to sustain any competitive advantage over time, the fit between its internal strengths and external environment needs to be ______. a. dynamic b. tangible c. compressed d. causal ambiguous

a. dynamic

In addition to having the lowest cost, a low-cost leader is likely to have ______. a. a small but loyal customer base b. high overhead c. a large market share d. unique product offerings

c

What are examples of intangible resource stock a company may have? (Check all that apply.) a. engineering expertise b. reputation for quality c. a manufacturing facility d. dynamic capabilities

a. engineering expertise b. reputation for quality d. dynamic capabilities

The purpose of a SWOT analysis is to ______. a. form a strategy that is tailored to the firm's unique strengths and weaknesses and the opportunities and threats in its environment b. assess if employees are performing their jobs correctly using an evaluation of their strengths and weaknesses c. deliver value-added resources in a socially complex environment d. adapt to planned emergence and scenario planning

a. form a strategy that is tailored to the firm's unique strengths and weaknesses and the opportunities and threats in its environment

______ describes a process in which the options one faces in the current situation are limited by decisions made in the past. a. path dependence b. social complexity c. resource allocation d. VRIO framework

a. path dependence

The interaction of the many individual systems in the operation of a company often leads to causal ambiguity because of ______. a. social complexity b. isolating mechanisms c. intangible resources d. path dependence

a. social complexity

Accounting and finance are ______ activities in a firm's value chain. a. support b. secondary c. ambiguous d. primary

a. support

Capital, land, buildings, and plants are examples of ______ resources. a. tangible b. component c. assumed d. intangible

a. tangible

Unlike capabilities, resources can be both ______. a. tangible and intangible b. tangible and expensive c. difficult to access and inexpensive d. easy to access and useful

a. tangible and intangible

A producer of consumer headphones that successfully differentiates its products with a patented noise-canceling technology and celebrity endorsements will enjoy which of the following benefits? (Check all that apply.) a. the ability to charge a premium price b. an increased exposure to the threat of price wars c. less intense competition from imitators d. reduced per unit costs

a. the ability to charge a premium price c. less intense competition from imitators

The perceived value that a company creates for consumers less the company's costs to create the value equals ______. a. the economic value created b. industry attractiveness c. a strategic trade-off d. a differentiation strategy

a. the economic value created

Which of the following are significant threats to a firm pursuing a cost-leadership strategy? (Check all that apply) a. value falling below the acceptable threshold b. replacement by innovative substitutes c. competitors adopting similar business strategies d. suppliers increasing input prices

a. value falling below the acceptable threshold b. replacement by innovative substitutes c. competitors adopting similar business strategies

According to the ______ rule, increasing the surface area (size) of a storage unit or retail facility results in a disproportionate increase in volume (space). a. minimum efficient b. cube square c. maximum effective d. superstore

b

Economies of scale are __________. a. increases in cost-leadership business level strategy b. decreases in cost per unit as output increases c. decreases in economic value due to competitive parity d. increases in minimum efficiencies of scale

b

Economies of scale present an opportunity to increase profits because as the number of units within the relevant range increases, fixed costs ______. a. vary only depending on the number of units produced b. stay the same c. increase only slightly d. decrease dramatically

b

In terms of productivity, which of the following is true of learning curves? a. They go up. b. They go down. c. They remain level. d. They are volatile.

b

Positive adjustments in product features, customer service, and complements may enable managers to ______. a. attract new employees b. improve the firm's strategic position c. weaken the firm's strategic position d. make themselves look good

b

Products in the affordable "business-casual" clothing market have largely become commoditized, and most retailers have begun to compete mainly on price rather than product features. In this environment, it is impossible for one retailer to gain market share without another losing it. This is an example of a ______ ocean. a. black b. red c. blue d. green

b

The goal of a _____________ strategy is to achieve expenses below those of competitors while maintaining similar value. A firm with this strategy could or could not achieve differentiation parity. a. business level b. cost leadership c. differentiation d. integration strategy

b

What is one of the benefits of pursuing a differentiation strategy when it comes to the power of suppliers? a. Differentiation provides protection against substitute products by lowering prices. b. Differentiation provides protection against an increase in input prices. c. Differentiation results in the erosion of margins. d. Differentiation results in costs that increase above acceptable thresholds.

b

What must strategic leaders keep in mind if they are going to achieve successful strategic positioning? a. A business strategy will only work if it already has superior performance. b. To achieve strategic positioning, firms must make important trade-offs. c. Although understanding their firm is crucial, understanding the industry is optional. d. They must work within existing areas of competition rather than trying to open new ones.

b

Which capability is required to create superior product features? a. marketing b. R&D c. accounting d. sales

b

Which of the following accurately describes the relationship between value and cost that would suggest that firm A has created a competitive advantage over firm B? a. (V - C)A > (V - C)C b. (V - C)A > (V - C)B c. (V - C)A < (V - C)B d. (V - C)A = (V - C)B

b

Which of the following situations would justify the use of manufacturing robots by a producer of packaged foods? a. several new competitors entering the market b. an increase in demand from the market c. an increase in the cost of raw materials d. a decline in consumer demand

b

Which value driver would be the focus of a company that sells products that are similar to competing products and that provides a 60-day guarantee with no questions asked? a. product features b. customer service c. complements d. profits

b

Why does the learning curve go down when productivity is considered? a. Learning cuts into the amount of time workers have, resulting in decreased productivity. b. As workers repeatedly engage in an activity, they become more efficient, driving down costs. c. The challenge of learning is an uphill battle, leading to decreases in worker morale. d. A large number of people can learn at the same time, leading to economies of scale.

b

True or false: A competitive advantage is most often maintained indefinitely. a. True b. False

b. False

True or false: Formulating a business strategy is a relatively easy task because only a few strategic options are available. a. True b. False

b. False

True or false: The value chain concept is applicable primarily to high-tech firms in rapidly changing environments. a. True b. False

b. False

Which of the following best describes the core competency of the Five Guys Burgers and Fries company? a. Making burgers with minimal wait time and cost b. Making high-quality burgers without limiting costs c. Making inexpensive burgers that are very flavorful d. Making quality burgers as part of a full-menu offering

b. Making high-quality burgers without limiting costs

Which competitive forces can result in the erosion of margins for both differentiation and cost-leadership business strategies? (Check all that apply) a. Threat of substitutes b. Power of buyers c. Power of suppliers d. Threat of entry

b. Power of buyers c. Power of suppliers d. Threat of entry

______ describes a situation in which different social and business systems interact with each other. a. Path dependence b. Social complexity c. Planned emergence d.Causal ambiguity

b. Social complexity

"Time compression diseconomies" refers to the concept that ______. a. some phenomena do not have a clear cause or effect b. attempting to get a good outcome in less time tends to be ineffective c. options one faces in the current situation are limited by past decisions d. barriers to imitation may prevent other firms from competing away a firm's competitive advantage

b. attempting to get a good outcome in less time tends to be ineffective

Isolating mechanisms are considered to be ______. a. something that weakens the industry b. barriers to imitation c. barriers to entry d. ways to wipe away a competitive advantage

b. barriers to imitation

What do the best firms in an industry seek to identify and manage on an ongoing basis as sources to respond to their external environment? (Check all that apply.) a. internal weaknesses b. core competencies c. capabilities d. resources

b. core competencies c. capabilities d. resources

Which of the following are considered the two generic business-level strategies? (Check all that apply.) a. monopolistic competition b. differentiation c. oligopoly d. value gap e. cost-leadership

b. differentiation e. cost-leadership

If the problem with a business strategy results in causal ambiguity, managers will ______. a. be able to apply an isolating mechanism for competitive advantage b. have a difficult time developing a theory to deal with the problem c. need training to communicate more clearly d.know to treat the problem as a transient issue

b. have a difficult time developing a theory to deal with the problem

_______ do not have physical attributes. a. component resources b. intangible resources c. tangible resources d. assumed resources

b. intangible resources

The value chain describes ______ of a firm. a. the relationship between resources and the external environment b. internal activities c. the external environment d. internal competencies

b. internal activities

According to the VRIO framework, in order for a firm to gain a temporary competitive advantage, a resource must be at least both ______. a. common and competitive b. rare and valuable c. rare and intangible d. valuable and intangible

b. rare and valuable

A cost leader can achieve a competitive advantage by ______. a. ignoring diseconomies of scale b. choosing a differentiation strategy c. reducing costs below those of competitors while maintaining a similar value d. focusing on reducing cost without considering the effect on value e. allowing people to customize their products

c

A firm's strategic position is determined by the relationship of which two variables? a. number of products sold and price of the product b. number of different products in the firm's portfolio and countries in which they are sold c. value creation and cost d. supply and demand

c

A successful blue ocean strategy requires strategists to reconcile the trade-offs between ______. a. profit margins and sales volume b. number of employees and high wages c. differentiation and cost-leadership d. private and public investment

c

Business-level strategy addresses which overarching question? a. How should we treat our employees? b. What should we produce? c. How should we compete? d. What should we sell?

c

Economies of ______ are the savings that come from producing two or more different outputs at a lower cost than producing each output individually. a. scale b. integration c. scope d. regulation

c

If two firms produce very similar products at the same rate of output, and firm A is able to achieve lower per-unit costs than firm B by taking advantage of a new manufacturing technology, firm A is benefiting from a. value driver advantages based on product features. b. a learning curve effect based on output differential. c. an experience-curve effect based on process innovation. d. creative destruction.

c

A struggling retailer seeking to implement a blue ocean strategy is likely to experience difficulty with ______. a. maintaining high quality customer service b. communicating the plan to lower-level employees c. locating products that satisfy customer needs d. cutting costs and increasing value at the same time

d

As JetBlue grew, which of the following occurred during the years following 2007? a. It focused only on highly profitable city routes. b. It began to share its blue ocean strategy with other airlines. c. It gained a sustainable competitive advantage. d. It suffered a competitive disadvantage.

d

By using a differentiation strategy, a firm aims to ______. a. provide a product that is similar to successful products already on the market b. pursue a broad segment of customers c. minimize its opportunity cost d. add unique features that will increase the perceived value of a product

d

The most significant challenge JetBlue faced in implementing its business strategy was _____. a. justifying its higher-than-average prices to budget-conscious consumers b. keeping up with new technological developments c. overwhelming consumer demand d. reconciling the trade-offs between cutting costs and providing superior service

d

Two important features that managers can adjust in an effort to improve the firm's strategic position are ______. a. customer service and investment value b. investment value and planned emergence c. planned emergence and product features d. product features and customer service

d

A firm's culture, brand equity, and intellectual property are examples of ______. a. ill-defined resources b. defined resources c. tangible resources d. intangible resources

d. intangible resources

The culture of Zappos is hard to imitate because it consists of numerous, diverse interactions among its employees, processes, procedures, and norms, that create which of the following? a. social ambiguity b. causal ambiguity c. causal complexity d. social complexity

d. social complexity

In performing a SWOT analysis to generate insights from external and internal analysis, internal strengths and weaknesses can be determined by applying ______ and external strengths can be evaluated in part by applying ______. a. Porter's five forces; PESTEL b. PESTEL; the VRIO framework c. Porter's five forces: the VRIO framework d. the VRIO framework; PESTEL

d. the VRIO framework; PESTEL

How are intangible resource stocks acquired? a. through decreasing development of tangible resources b. through developing tangible resources c. through financial returns on assets d. through investments over time in intangible resources

d. through investments over time in intangible resources

Which of the following is not considered an isolating mechanism? a. causal ambiguity b. social complexity c. better expectations of future resource value d. uncertainty about future resource value e. path dependency

d. uncertainty about future resource value