MGMT495 MT1

Both Vibrant Phones Inc. and Oryxo Inc. incur a cost of $200 to manufacture a single unit of a cell phone. However, Vibrant Phones creates more economic value than Oryxo does. What does this imply? Vibrant Phones sells its products at a better price than Oryxo. Vibrant Phones and Oryxo have achieved a competitive parity. Oryxo's offering has greater total perceived consumer benefits than Vibrant Phones's offering. Oryxo has a competitive advantage over Vibrant Phones.

Vibrant Phones sells its products at a better price than Oryxo.

Jorge is part of a sales team. He effectively coordinates his tasks with others in the team and willingly contributes to their efforts in achieving the team's objectives. Thus, Jorge is in ________ of the Level-5 leadership pyramid. level 1 Level 4 Level 5 Level 2 Level 3

2

Which of the following statements with regard to industry structures is true? A consolidated industry tends to be more profitable than a fragmented one. They are stable over time, not dynamic. Having few but large competitors increases the threat of strong competitive forces such as supplier or buyer power. Having a large number of competitors generally equates to higher industry profitability.

A consolidated industry tends to be more profitable than a fragmented one.

The primary objective of Porter's five forces model is to A) understand the profit potential of different industries. B) replace a firm's competitive advantage with competitive parity. C) break down a firm's value chain activities into primary and support. D) reduce the gap between the value of a firm's product and its cost of production.

A) understands the profit potential of different industries

________ are incidents that describe highly improbable but highly impactful events. Fat tail risk events Miracle events Black swan events Wild card events

Black Swan Events

Which of the following factors best contributes to the U.S. automotive industry being characterized by high entry barriers? New auto companies create electric cars powered by simpler motors and gearboxes. Few industrial products are as easy to build as cars powered by internal combustion engines. Car manufacturers require large-scale production in order to be cost-competitive. New entrants in the automotive industry expect that incumbents will not or cannot retaliate.

Car manufacturers require large-scale production in order to be cost-competitive.

A firm that achieves superior performance relative to other firms in the same industry or the industry average has a(n) competitive advantage. power position. balanced scorecard. equity leverage.

Comp adv

Which of the following summarizes the difference between corporate strategy and business strategy? Corporate strategy deals with how to compete; business strategy deals with when to compete. Corporate strategy deals with how to compete; business strategy deals with where to compete. Corporate strategy deals with when to compete; business strategy deals with how to compete. Corporate strategy deals with where to compete; business strategy deals with how to compete.

Corporate strategy deals with where to compete; business strategy deals with how to compete.

________ is best described as the difference between a buyer's willingness to pay for a product or service and a firm's total cost to produce it. Cost of capital Economic value created Consumer surplus Break-even point

Economic value created

The working capital turnover of Tesva Systems Corp. is 6.0. What does this financial data suggest? For every $6.00 Tesva Systems puts to work, the company incurs a cost of $1.00. For every dollar Tesva Systems puts to work, the company realizes $6.00 in loss. For every $6.00 Tesva Systems puts to work, the company realizes sales of $1.00. For every dollar Tesva Systems puts to work, the company realizes $6.00 of sales.

For every dollar Tesva Systems puts to work, the company realizes $6.00 of sales.

Which of the following questions challenges managers to come up with strategic objectives that ensure future competitiveness? How do shareholders view us? How do customers view us? How do we create value? What core competencies do we need?

How do we create value?

The management of a company is assessing the value of all the tangible resources the company owns. Which of the following will be included in this assessment? the company's copyrights the company's machinery the company's patents the company's brand equity

Machinery

When companies that manufacture shipping containers want to buy iron ore, the purchase decision is solely based on price. This is because there are a large number of sellers in the iron ore industry, and iron ore is a highly undifferentiated commodity. Which of the following industry competitive structures does the iron ore industry best illustrate? monopoly perfect competition oligopoly monopolistic competition

Perfect Competition

The three financial ratios that constitute return on revenue are Cost of goods sold/Revenue, Research & Development expense/Revenue, and Economic value created/Revenue. Selling, general, & administrative expense/Revenue. Total return to shareholders/Revenue. Accounting profitability/Revenue.

SG&A/Revenue

________ provides a decision tool that enables a firm to act as a good corporate citizen by allowing its managers to recognize, prioritize, and address the needs of different groups of individuals who take personal interest in the firm's performance and survival. Strategy analysis Stakeholder impact analysis Strategic positioning The SWOT analysis

Stakeholder impact analysis

________ is best described as an integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage. Supply chain management Integrated technology management Inventory management Strategic management

Strategic Management

Which of the following forces was not originally a part of Michael Porter's fives forces model? strategic role of complements rivalry among existing competitors threat of substitute products or services bargaining power of buyers

Strategic role of compliments

The market capitalization of a public company is $5 billion. Each share of the company is traded at $200. What do you infer from this financial data? The firm's economic value created is $5 billion. The firm's number of outstanding shares is 25 million. The firm pays an annual dividend of 10 percent. The firm's total return to shareholder is $5 billion.

The firm's number of outstanding shares is 25 million.

Which of the following statements is not true about the five forces in Porter's competitive analysis model? The relative strengths of the five forces that shape competition are context-dependent. The stronger the five forces in an industry, the greater the industry's profit potential. An analysis of the five forces provides the basis for how a firm should position itself to gain and sustain a competitive advantage. Competition in the model is described as the tug-of-war between the five forces to capture as much as possible of the economic value created in an industry.

The stronger the five forces in an industry, the greater the industry's profit potential.

________, which is the return on risk capital, includes stock price appreciation plus dividends received over a specific period. Total return to shareholders Receivables turnover Dividend yield Earnings per share

Total return to shareholders

True Help is a nonprofit organization that works toward rehabilitating the homeless. The credo of the organization is "help us help you." For an organization like True Help, which of the following statements would make an appropriate mission? Our mission is to turn this not-for-profit organization into a for-profit organization so that the stakeholders are benefited. We help the homeless gain and sustain financial independence by providing employment opportunities. One day, everyone in this nation will have a home to protect themselves. Help us help you find a home.

We help the homeless gain and sustain financial independence by providing employment opportunities.

Shortly after the small island of Balamia experienced multiple unexpected high-intensity earthquakes that caused massive destruction, many banks and insurance companies filed for bankruptcy. This left the economy of the country in a poor state. The natural calamity in Balamia best exemplifies skewness risk. kurtosis risk. a black swan event a wild card event.

a black swan event

Shield Autos Inc. has newly launched a luxury car into the European market. Which of the following would most likely not be a complement to the car? a car service station managed and run by Shield Autos Inc. a stereo system that can be used as a GPS system in cars a bank that insures cars against theft and accidents a premium car manufactured and sold by Mova Autos Inc., a rival company

a premium car manufactured and sold by Mova Autos Inc., a rival company

Which of the following is an element of good strategy? a guiding policy to address employee satisfaction a set of coherent actions to implement the firm's guiding policy an approach that underestimates the competition an explanation of the firm's advantages over competitors

a set of coherent actions to implement the firm's guiding policy

Which of the following is the most accurate characterization of stakeholder theory? an approach to understanding a firm, which involves balancing multiple internal and external performance metrics in order to gain a competitive advantage an approach to understanding a firm as being in a highly competitive industry, which requires the use of effective market capitalization to gain a competitive advantage an approach to understanding a firm, which involves balancing tangible assets and intangible assets to achieve high accounting profitability an approach to understanding a firm as embedded in a network of internal and external constituencies that each make contributions and expect consideration in return

an approach to understanding a firm as embedded in a network of internal and external constituencies that each make contributions and expect consideration in return

Ambrosia Inc., a leading chocolate producer, anticipated that the prices of cocoa beans would double in less than three years. This would disrupt the availability of cocoa in the industry. Thus, Ambrosia Inc. decided to purchase cocoa plantations in Ghana. As predicted, the prices of cocoa increased twofold. Because of the company-owned cocoa plantations, Ambrosia Inc. was able to sustain its competitive advantage in turbulent times. Which of the following isolating mechanisms does this scenario best illustrate? better expectations of future resource value causal ambiguity social complexity time compression diseconomies

better expectations of future resource value

The translation of strategy into action primarily takes place in a firm's executive summary. mission statement. business model. code of conduct.

business model

Dandelions Max is a consumer electronics company. It has acquired an edge over its competitors through its ability to provide breakthrough technology at the lowest price in the market. This advantage of Dandelions Max best exemplifies a capital gain. markup. core competency. resource flow.

core competency

Customer-oriented visions do not define how a customer need will be met. leave open the means to of how to meet a need. define a business according to solutions. provide companies with a competitive advantage.

define how a customer need will be met.

The first step in the strategic management process is to develop functional and business-level strategies. put the guiding policies of a firm into practice. understand the strategies of the competitors. define a firm's vision, mission, and values.

define a firm's vision, mission, and values

Industry effects describe the underlying ________ structure of the industry. psychographic economic demographic ethnographic

economic

Stakeholder impact analysis primarily helps a firm exploit external stakeholders to benefit internal stakeholders. lower the difference between its value creation and costs. single-mindedly focus on shareholders alone. gain a competitive advantage while still acting as a good corporate citizen

gain a competitive advantage while still acting as a good corporate citizen

With the emergence of smartphones, users no longer have to carry a separate music player, a video game, a laptop, or a magazine to keep themselves entertained when traveling. A smartphone is loaded with a variety of applications to satisfy all the customer needs that different industries or products individually satisfied earlier. As a result, the smartphone industry has been posing a threat to a lot of other unrelated industries. What is this phenomenon best known as? backward integration industry convergence product differentiation customer myopia

industry convergence

The government of Filvia has mandated that the standard minimum wage in the country be increased to $8,000 per year. This has ensured that all firms in the country pay their employees at least $8,000 per year, which has brought about a higher standard of living for the people of Filvia. Which of the following factors in a firm's general environment does this mandate best indicate? ecological factors legal factors sociocultural technological

legal

The share price of Groupon, a daily-deal website, fell by 90 percent just a year after its successful initial public offering. The firm was not able to sustain its competitive advantage because of the emergence of other daily-deal sites that were able to better serve the needs of local markets and specific population groups. Which of the following is the most accurate inference from this example? Groupon's competency was built more on an intangible resource than on a tangible one. Groupon operated in an industry where the barriers to entry were high. Groupon invested in resources that were invaluable and common. Groupon's competency was not hard to imitate.

not hard to imitate

Pure Carat Inc. is a company that sells 24-carat gold biscuits to companies that manufacture jewelry. Since the company operates in an industry where many other suppliers sell standardized products, it can most likely easily achieve a sustainable competitive advantage. easily achieve a temporary competitive advantage. only achieve competitive parity. maintain its absolute advantage for long time.

only achieve competitive parity.

The management of Wong Industries showed a commitment to ________ by increasing the salary of many female employees to meet its goal of having equal pay for women and men who perform comparable work. organizational values product-oriented vision upper-echelons theory scenario planning

organizational values

Beats Electronics has been able to outperform Audio-Technica, Bose, JBL, Skullcandy, Sennheiser, and Sony in the high-end, premium headphone market. Which of the following statements accurately explains one of the main reasons for the success of Beat? It focused on sponsoring future athletic superstars. It emphasized marketing over core competency. It produced the highest-quality headphones. It created a perception that owning its products was cool.

perception of coolness

The resource-based view of a firm assumes that the resource bundles of firms competing in the same industry tend to be highly mobile, moving easily from firm to firm. resources of firms are highly exhaustible and hence they cannot contribute to their competitive advantage. resources of firms are highly scarce and hence the government interferes to ensure equal distribution. resource bundles of firms competing in the same industry are unique to some extent and thus differ from one another.

resource bundles of firms competing in the same industry are unique to some extent and thus differ from one another.

Home Value Inc., Max Cart Inc., and Nice Necessities Inc. are three consumer-product retailing companies. Their products consist primarily of day-to-day items that are easy to imitate and sell. All three companies use the same resources and capabilities in the production and distribution of their products. Which of the following is an implication of the market condition indicated in this scenario? Resource immobility of the firms will be low. Barriers to entry within the industry will be high. Any advantage that one firm has will be short-lived. The industry structure will be far from perfect competition.

short-lived

The management team at Clear Solutions, Inc. decided to build a branch office in Memphis, Tennessee. Which of the following terms correctly describes this action? business strategy strategy implementation strategy formulation execution of strategy

strategy formulation

Patterson Foods Inc. was the first company to start selling energy bars in its country—a product that gained popularity among diverse groups. Soon, other companies started to sell their own brands of energy bars, thereby giving Patterson Foods ample competition. In response, Patterson Foods decided to limit its variety of energy bars to only four. However, it ensured that these four varieties were low in calories and low in cost. With this innovation, Patterson Foods Inc. consistently outperformed its competitors for ten years. In this scenario, Patterson Foods Inc. maintained a ________ through its innovative strategy. sustainable competitive advantage fiduciary responsibility consistent power position balanced scorecard

sustainable competitve advantage

Which of the following forces tends to be more important in determining a firm's performance? the number and size of other firms in the industry the entry barriers in the industry the actions of managers within the firm the underlying economic structure

the actions of managers in the firm

Gene Craft Inc. is the market leader in the pharmaceutical industry. Though most of its resources are common to those of its competitors, a few rare resources have helped the company gain and sustain a competitive advantage. Which of the following assets of Gene Craft Inc. is most likely to be considered a rare resource that is best contributing to its competitive advantage? the company's chemical patents the company's land and buildings the company's raw material supplies the company's plant and machinery

the company's chemical patents

Smooth Fusion Inc. is a software company, which has built and acquired numerous assets over the years. According to the resource-based view of a firm, which of the following assets of Smooth Fusion Inc. will best enable it to gain and sustain a competitive advantage? the headquarters owned by the company the resources of the company that are mobile the capital raised by the company from its shareholders the expertise acquired by the employees in the company

the expertise acquired by the employees in the company

Handy Pro, Inc. is a company that manufactures electric tools like drills, screwdrivers, and saws. Which of the following best illustrates a product-oriented vision for Handy Pro? to allow everyone to have the luxury of electric tool technology to help people save time and energy spent using manual tools to make people's lives simple and easy to be the pioneering manufacturer of electric tools

to be the pioneering manufacturer of electric tools

Which of the following approaches to assess competitive advantage is based on the view that noneconomic factors can have a significant impact on a firm's financial performance? the accounting profitability approach the balanced-scorecard the economic value creation framework the triple-bottom-line approach

triple-bottom-line approach

The CEO of Juliet Computers was the child of parents who had difficulty making enough money to support their family. As a result, he and his siblings did not have access to many advantages that children from wealthier families had. This CEO, therefore, emphasized making affordable computers that could be bought by low-income households. Which of the following does this example demonstrate? upper-echelons theory dominant strategic planning Level-5 leadership pyramid scenario planning

upper-echelons theory

Crystal Tech Inc.'s competency in designing and manufacturing efficient microprocessors has made its laptops the most advanced computers in the market. This competency, along with the just-in-time manufacturing system, has enabled Crystal Tech Inc. to increase its profitability by lowering its production costs. Thus, Crystal's competency in designing and manufacturing microprocessors will be considered a(n) ________ resource in the VRIO framework. inexhaustible valuable tangible perishable

valuable