MGT 487 Final
Which of the following is an example of competitive parity? A) A firm manufactures higher-quality wall clocks than its competitors. B) A firm provides wall clocks that its consumers value more than other wall clocks. C) A firm sells wall clocks at a lower price than its competitors. D) A firm produces a similar number of wall clocks at a similar cost as its competitors
A firm produces a similar number of wall clocks at a similar cost as its competitors
Which of the following best illustrates forward vertical integration? A) A firm that manufactures and sells car engines to major automobile companies launches its own line of cars. B) A chain of ice cream parlors launches a brand of toys and accessories for children. C) A multinational coffee chain sources its coffee beans from plantations in Brazil and Vietnam. D) A designer shoe company that previously purchased leather from external suppliers establishes its own leather tannery.
A firm that manufactures and sells car engines to major automobile companies launches its own line of cars
Which of the following statements is true about managing alliance-related tasks? A) Forming an alliance with another firm prohibits that firm from forming other alliances. B) Alliance management capability is based on three alliance-related tasks. C) A merger is one of the three options for alliance design and governance. D) In post-formation alliance management, none of the firms in an alliance is permitted to gain a competitive advantage.
Alliance management capability is based on three alliance-related tasks
How is an equity alliance different from a joint venture? A) An equity alliance involves ownership that facilitates transaction-specific ventures; a joint venture involves taking ownership by buying stock. B) An equity alliance involves taking ownership in a partner; a joint venture involves two or more entities owning a firm. C) An equity alliance involves taking ownership in a partner; a joint venture involves taking ownership by buying stock. D) An equity alliance involves partners contributing equity to a joint venture; a joint venture involves two or more entities owning a firm.
An equity alliance involves taking ownership in a partner; a joint venture involves two or more entities owning a firm
Center Street Supply Co. has successfully achieved a competitive advantage in the detergent and cleaning solution industry as a differentiator. Which of the following scenarios would undermine Center Street's position? A) Center Street improves the formula for its most popular cleaner without increasing the price. B) Center Street introduces a new biodegradable bottle that raises cost and perceived value. C) Center Street's customers start to consider cleaning solutions a commodity. D) Center Street's product has not established an acceptable standard of quality.
Center Street's customers start to consider cleaning solutions a commodity
Tony's Pizza Shop is able to net $10,000 a week; this makes the shop profitable. Its number one competitor, Leo's Pies, is also profitable, netting $12,000 a week. Lil Anthony's Pizza Palace nets $13,000 a week. Since Tony's Pizza Shop is profitable, we can conclude that it has a competitive advantage in its industry. A) True—competitive advantage is achieved through profitability alone. B) True—competitive advantage is achieved since Tony has a positive net income. C) False—competitive advantage is only achieved by generating above average returns, relative to competition. D) False—Tony more than likely has a sustained competitive advantage since he's been in business longer.
False—competitive advantage is only achieved by generating above average returns, relative to competition
Finjob is following a related-linked diversification strategy, and Rangreen is following a related-constrained diversification strategy. How do the two firms differ from each other? A) Rangreen Inc. generates 70 percent of its revenues from its primary business, while Finjob generates only 10 percent of its revenues from its primary business. B) Rangreen pursues a backward diversification strategy, while Finjob pursues a forward diversification strategy. C) Finjob will share fewer common competencies and resources between its various businesses when compared with Rangreen D) Finjob pursues a differentiation strategy, and Rangreen pursues a cost-leadership strategy, to gain a competitive advantage.
Finjob will share fewer common competencies and resources between its various businesses when compared with Rangreen
Which of the following is a feature of the shakeout phase of the industry life cycle? A) Standards begin to emerge in the industry. B) Market demand in this stage primarily consists of first-time adopters. C) Firms begin to compete directly against each other. D) The mode of competition shifts from price to nonprice in this stage.
Firms begin to compete directly against each other.
DalTech Inc., a publicly traded company, designs and manufactures wearable technology. What approach should DalTech take after a long period of horizontal integration in its industry? Assume that the industry is now stable and competitors have not made any major changes in price or marketing recently. A) Compete based on price in order to drive out remaining competitors and create a monopoly. B) Focus on research and development as a form of non-price competition. C) Encourage new competitors to enter the market to improve competition. D) Prepare to resist a hostile takeover by buying back as much stock as possible.
Focus on research and development as a form of non-price competition
Evaluate the following statement: Strategic leaders should always try to pursue a blue ocean strategy because it is the most complex, coveted, and most desirable strategy that exists. A) I agree; firms should always pursue a blue ocean strategy because the benefits outweigh the cost. B) I agree; firms should pursue a blue ocean strategy because it's harder for competitors to replicate. C) I disagree; firms should never pursue a blue ocean strategy because it's much too complex. D) I disagree; firms should only pursue this strategy if they are able to reconcile the tradeoffs of each generic strategy.
I disagree; firms should only pursue this strategy if they are able to reconcile the tradeoffs of each generic strategy
________ are barriers to imitation that prevent rivals from competing away the advantage a firm may enjoy. A) Embargoes B) Cartel arrangements C) Isolating mechanisms D) Market niches
Isolating mechanisms
Five Guys has become successful in a highly competitive industry dominated by fast-food giants like McDonald's and Burger King, as well as direct competitors claiming to be "better burger" joints such as Smashburger, Burgerfi, and Shake Shack. Which of the following statements accurately explains the main reason for the success of Five Guys? A) It created customized, made-to-order food using the highest-quality ingredients. B) It created a perception that eating its products was cool. C) It emphasized marketing over core competency. D) It focused keeping prices as low as possible.
It created customized, made-to-order food using the highest-quality ingredients.
Which of the following is a disadvantage of a horizontal integration corporate strategy? A) It increases competitive intensity within an industry. B) It increases the potential for integration failure. C) It increases the potential for flexibility. It increases the threat of new entrants in an industry
It increases the potential for integration failure
Which of the following is a drawback of vertical integration? A) It increases the difficulty of securing critical supplies. B) It impedes scheduling and planning. C) It increases the potential of legal repercussions. D) It impedes investments in special assets.
It increases the potential of legal repercussions
Ganjaflex Industries is a major multinational conglomerate. Its business units compete in a range of industries, including home appliances, pharmaceuticals, commercial real estate, and plastics manufacturing. Although its largest business unit, which produces kitchen appliances, is among the most profitable in the industry, it generates only 35 percent of the company's revenues. Which of the following is most likely true of Ganjaflex's stock price? A) It is valued at less than the sum of its individual business units. B) It is valued at greater than the sum of individual business units. C) It is valued at the exact sum of individual business units. D) It is consistently lower than the industry average.
It is valued at less than the sum of its individual business units
Which of the following examples describes the task of an alliance manager? A) Reem oversaw the agreement between her company and a potential alliance partner and offered support when needed. B) Harry used his knowledge of drone technology to help him manage the day-to-day operations of his firm's alliance. C) Nargis reviewed the alliance portfolio to make sure it fit with the corporate strategy of her firm. D) Omar trained the employees of his alliance partner in the skills needed to create a display for a wide-screen television.
Omar trained the employees of his alliance partner in the skills needed to create a display for a wide-screen television
________ describes a process in which the options one faces in a current situation are limited by decisions made in the past. A) Social complexity B) Path dependence C) Cannibalization D) Causal ambiguity
Path dependence
Which of the following below is considered an advantage of using a platform business model? A) Platforms scale efficiently by implementing gatekeepers. B) Platforms work within an existing industry based on physical assets. C) Platforms benefit from a traditional system of horizontal business organization. D) Platforms unlock new sources of value creation and supply.
Platforms unlock new sources of value creation and supply
What is the main reason that most mergers and acquisitions negatively affect shareholder value? A) The entire market becomes an oligopoly or a monopoly. B) Promised synergies never take place. C) Market conditions change too quickly. D) Companies that resist acquisitions are subject to the "winner's curse."
Promised synergies never take place
Which of the following scenarios best illustrates horizontal integration? A) Silis Inc. enters into a licensing contract with a distributor in a new international market. B) Silis Inc. acquires a component parts manufacturer that previously supplied to Silis' competitor. C) Silis Inc. sets up its own distribution channel and retail stores. D) Silis Inc. joins with Cancity Inc., one of its direct competitors.
Silis Inc. joins with Cancity Inc., one of its direct competitors
Which of the following describes an airline that is most likely stuck in the middle? A) Stratosphere offers complimentary drinks and meals, coast-to-coast coverage via connecting hubs, plush airport lounges, and high prices. B) Cloud Rider offers international routes and global coverage, high customer service, high reliability, and high prices. C) Skypath offers high-quality beverages and meals, plush airport lounges, only a few connections via domestic hubs, poor customer service, and low prices. D) Wingspan offers no assigned seating, no in-flight amenities, no drinks or meals, no airport lounges, and low prices.
Skypath offers high-quality beverages and meals, plush airport lounges, only a few connections via domestic hubs, poor customer service, and low prices
In order to achieve a competitive advantage, the Heavenly Hotels, a chain of luxury beach resorts, wants to increase its market share. Which of the following strategies is most likely to do so? A) Maintain prices but significantly increase spending on customer service and other amenities. B) Lower prices but eliminate several of the features that have come to define Heavenly Hotels properties for consumers, such as complimentary meals and in-room massages. C) Take advantage of economies of scale and scope by opening a chain of lower-priced economy hotels that leverage the Heavenly Hotels brand image. D) Raise prices without increasing spending on customer service or resort features.
Take advantage of economies of scale and scope by opening a chain of lower-priced economy hotels that leverage the Heavenly Hotels brand image
Which of the following is a feature of the growth stage of the industry life cycle? A) The consumer demand increases. B) The prices of goods begin to rise. C) The basis of competition moves away from process innovation. D) The number of competitors decreases.
The consumer demand increases
Which of the following describes a firm pursuing a harvest strategy? A) The firm exits the industry by bankruptcy, liquidation, or divestments. B) The firm reduces investments in product support and allocates only a minimum of human and other resources. C) The firm continues to support marketing efforts at a given level despite the fact that consumption for its product has been declining. D) The firm buys out industry rivals to stake out a strong position.
The firm reduces investments in product support and allocates only a minimum of human and other resources
Why is the phase after the growth stage of the industry life cycle referred to as the shakeout stage? A) The barriers to entry increase during this stage. B) The firms in the industry yield the highest profits during this phase. C) Rivalry among competitors decreases in this stage. D) The weaker firms are forced out of the industry in this stage.
The weaker firms are forced out of the industry in this stage
Which of the following statements accurately describes the distinction between the introduction and growth stages of the industry life cycle? A) There is more strategic variety in the growth stage when compared to the introduction stage. B) The number of competitors is more in the introduction stage than the growth stage. C) The market size for a new product or service is larger in the introduction stage when compared to the growth stage. D) While achieving market acceptance is the strategic objective during the introduction stage, the objective in the growth stage is to pursue a harvest strategy.
There is more strategic variety in the growth stage when compared to the introduction stage
Which of the following is true of acquisitions? A) They can be friendly or hostile. B) They occur only when the involved entities are of comparable size. C) An acquisition occurs when two independent companies join to form a separate third entity. D) Acquisitions increase the competitive intensity in an industry.
They can be friendly or hostile
Which of the following describes the group of customers referred to as the early majority? A) They come into the market during the shakeout stage. B) They are the last to come into the market. C) They enter the market during the maturity stage. D) They enter the market during the growth stage.
They come into the market during the shakeout stage
Johnson is an executive vice president at Conecom Hardware. He researches a proposal by a larger company, Openlane Hardware, to combine the two companies. By analyzing past performance, conducting focus groups, and interviewing Openlane employees, Johnson concludes that Openlane has poor profit margins, sells shoddy merchandise, and treats customers poorly. What actions should Johnson and Conecom Hardware take? A) Turn down the acquisition offer, and prepare to resist a hostile takeover. B) Attempt a friendly merger, and use managerial hubris to improve results at Openlane. C) Welcome the acquisition, and use knowledge transfer to impart Conecom Hardware's management practices. D) Do nothing; the two companies cannot combine without Conecom Hardware's explicit consent. A
Turn down the acquisition offer, and prepare to resist a hostile takeover
Why is it easier for new entrants to get involved in radical innovations when compared to incumbent firms? A) Unlike incumbent firms, new entrants do not have to initially face the high entry barriers. B) New entrants are embedded in an innovation ecosystem, while incumbent firms are not. C) Unlike incumbent firms, new entrants do not have formal organizational structures and processes. D) Incumbent firms do not have the advantages of network effects that new entrants have.
Unlike incumbent firms, new entrants do not have formal organizational structures and processes
Shapiro-Rennart is a large conglomerate. In the context of the Boston Consulting Group (BCG) growth-share matrix, the company's healthy-living strategic business unit (SBU) has been categorized as a "cash cow," and its tobacco SBU has been categorized as a "dog." Which of the following can be inferred from this scenario? A) While the tobacco SBU operates in a low-growth market, the healthy-living SBU operates in a high-growth market. B) The management of the company should use the cash inflow from the healthy-living SBU and invest it in the tobacco SBU. C) While the market share of the company in the healthy-living industry will be high, the market share in the tobacco industry will be low. D) The tobacco SBU should follow a backward integration strategy, and the healthy-living SBU should pursue a forward integration strategy.
While the market share of the company in the healthy-living industry will be high, the market share in the tobacco industry will be low
Which of the following best illustrates a hostile takeover between the two companies Windfield Inc. and Zyco Inc.? A) Windfield Inc. purchases Zyco Inc. for $95 billion despite Zyco Inc. being against the purchase. B) Windfield Inc. and Zyco Inc. join together to form a third new entity, while they also operate separately. C) Windfield Inc. outsources a few of its business activities to Zyco Inc. for competitive advantage. D) Windfield Inc. and Zyco Inc. join together to form a single new company called WindfieldZyco Inc.
Windfield Inc. purchases Zyco Inc. for $95 billion despite Zyco Inc. being against the purchase
Funholding is a large multinational company active in the petroleum, capital market, chemicals, steel, beverages, hospitality, airlines, automobiles, and consumer electronics industries. The company has multiple brands and a large product portfolio under its banner. Which of the following terms would best describe this company? A) a flagship brand B) a single-business firm C) a dominant-business firm D) a conglomerate
a conglomerate
Sonron Corporation generates 85 percent of its annual revenues by manufacturing luxury cars. The company derives 15 percent of its annual revenues by selling sports merchandise such as apparel, shoes, and other accessories under the same brand name. Which of the following terms best describes Sonron Corporation? A) a conglomerate B) a subsidiary C) a dominant-business firm D) a single-business firm
a dominant-business firm
Which of the following best illustrates physical-asset specificity? A) a unique training program developed in an organization B) a ship container designed to carry more than the average load of iron ore C) a generic machine that can be used to churn different mixtures D) a machine solely designed to give a candy its trademarked shape
a machine solely designed to give a candy its trademarked shape
1) Deluxe Yachts Inc., a large luxury yacht manufacturer, made an initial small investment in a startup company that was developing an ecologically friendly waste-water recycling system. This gave Deluxe Yachts controlling interests in the startup company. However, Deluxe Yachts had no obligations to make continued investments in the experiments of the startup company. It could invest small amounts depending on the new product's success at each stage of its development. If the product proved to be successful, Deluxe Yachts would have the right to buy out the startup company. This approach to strategic alliance is referred to as A) a break-even analysis. B) a real-options perspective. C) credible commitment. D) transaction cost economics.
a real-options perspective
Which of the following is an element of good strategy? A) a summary of the firm's history within its industry B) a guiding policy to address employee satisfaction C) a set of coherent actions to implement the firm's guiding policy D) an approach that underestimates the competition
a set of coherent actions to implement the firm's guiding policy
Which of the following examples uses a focused differentiation strategy? A) a tennis pro shop that sells high-quality, custom racquets priced at $350 dollars per racquet B) a coffee shop that offers mediocre lattes and brewed coffee at a price of $5 per small cup C) a hotel chain that offers high-quality furnishings and service with room rates under $75 per night D) a clothing brand that offers gender-neutral hoodies and sweatpants priced at $20 per item
a tennis pro shop that sells high-quality, custom racquets priced at $350 dollars per racquet
When Aviato Inc. wanted to sell its cars in the country of Serbia, it lacked access to distribution channels and marketing expertise in the country. Thus, Aviato Autos had to enter into a strategic alliance with a local automobile company to get access to the foreign partner's well-established distribution channels. Which of the following reasons for entering into a strategic alliance is best illustrated in this scenario? A) increasing competitive intensity B) accessing critical complementary assets C) procuring additional capital investments D) reducing differentiation of product and service offerings
accessing critical complementary assets
The Konex Hotel Group purchased Green-Plus Hotels for an estimated value of $120 billion. All the hotels previously owned by Green-Plus Hotels are now managed by the Konex Hotel Group and are known as Konex hotels. What does this scenario best illustrate? A) a merger B) a joint venture C) an acquisition D) an equity alliance
an acquisition
When wireless service providers offer free or discounted mobile phones for subscribers to their wireless voice and data service, the perceived value of the service offering increases. In this case, the value driver would be A) economies of scale. B) learning-curve effects. C) experience-curve effects. D) availability of complements.
availability of complements
In a successful________ strategy, the trade-offs between differentiation and low cost are reconciled. A) blue ocean B) focused differentiation C) liquidation D) divestment
blue ocean
Several notable firms, including Eli Lilly, HP, Procter & Gamble, and IBM, each wish to become the alliance "partner of choice" for small technology ventures, colleges, and inventors. They each know that________ is a necessary and critical element for an alliance to be a success. A) sharing explicit knowledge B) building interorganizational trust C) a hostile takeover D) partner implementation
building interorganizational trust
How did the recent horizontal integration in the U.S. airline industry provide benefits to the surviving carriers? A) by facilitating excess capacity in the industry B) by preventing mergers from taking place C) by lowering competitive intensity in the industry overall D) by increasing the threat of entry in the industry
by lowering competitive intensity in the industry overall
How does horizontal integration within an industry affect the surviving firms? A) by increasing the threat the surviving firms will face from new entrants B) by strengthening the rivalry among existing firms C) by requiring the surviving firms to shift their focus from non-price to price competition D) by strengthening the bargaining power of the surviving firms vis-à-vis suppliers and buyers
by strengthening the bargaining power of the surviving firms vis-à-vis suppliers and buyers
Solaramus Inc., Sun Energy Inc., and SkyHigh Solar Inc. are three rival firms who have set up an alliance to conduct research and find a way to run vehicles with solar power. They have made almost equal contributions to the research, and they also share their expertise with one another. However, the three firms will continue to behave as competitors in markets for other solar products. What is this arrangement best referred to as? A) takeover B) buyout C) co-opetition D) acquisition
co-opetition
The Tata group of India, Warren Buffet's Berkshire Hathaway, and the Japanese Yamaha group have several strategic business units under one corporate umbrella and are pursuing an unrelated diversification strategy. We would refer to these businesses as A) differentiators. B) conglomerates. C) internal competitors. D) vertically integrated.
conglomerates
One of the reasons that Circuit City filed for bankruptcy was due to its inability to reinvest, hone, and upgrade its once-impressive resource base. Ultimately, Circuit City's core competences became A) core rigidities. B) value chain activities. C) strategic resources. D) costly to imitate.
core rigidities.
University Home Goods is a home furnishings company that caters to college students and other highly price-conscious customers. Through its simple designs, acceptable quality levels, and minimal customer service, the company has been able to sell its merchandise at the lowest prices in the industry. Which of the following generic business strategies is University Home Goods applying? A) cost-leadership B) differentiation C) niche marketing D) product diversification
cost-leadership
Wenonah Capital Partners asked one of its partners, a research and development (R&D) firm, to concentrate on developing new medications for Parkinson's disease. But the project requires a huge capital investment, and the R&D partner has some reservations about Wenonah's long-term commitment to the project. To prove its commitment, Wenonah pledges an investment of $200 million over five years. This investment by Wenonah in the project will result in a A) cartel. B) credible commitment. C) corrective action. D) parent-subsidiary relationship.
credible commitment
The demand for flip phones has drastically reduced, and there are only a few consumer electronics companies selling them at extremely low prices. Also, the current buyers of flip phones are mainly categorized under laggards. Which of the following stages of the industry life cycle is the flip phone industry in currently? A) growth stage B) maturity stage C) decline stage D) commercialization stage
decline stage
In a focused cost-leadership strategy, a firm A) caters to the segment of the market that is least cost sensitive. B) provides high-priced products for many different segments of the mass market. C) delivers low-cost products and services to a specific, narrow part of the market. D) focuses on reducing the economic value created to drive down costs.
delivers low-cost products and services to a specific, narrow part of the market.
When a firm does not continually upgrade or improve core competencies, its competitors are likely to A) grow their company at any cost. B) across the board. C) develop equivalent or superior skills. D) expand their product line.
develop equivalent or superior skills.
1) Horizontal integration through mergers and acquisitions can help firms strengthen their competitive positions by increasing A) perfect competition. B) differentiation. C) oligarchy. D) natural monopoly
differentiation
According to an evaluation using the VRIO framework, Crocs, inventor of the iconic plastic clog, was unable to sustain its competitive advantage primarily because its products were A) invaluable and common. B) easy to imitate. C) extremely rare. D) non-substitutable.
easy to imitate.
Which of the following best illustrates site specificity? A) equipment necessary for mining bauxite and aluminum smelting B) bottling machinery to manufacture bottles with trademarked shapes C) investment made in human capital to master procedures of a specific organization D) investment made to train employees to operate computers
equipment necessary for mining bauxite and aluminum smelting
Bath & Chill is a spa that caters to the needs of a small percentage of highly health-conscious consumers. It offers state-of-the-art treatments in a luxurious setting. Since there are very few spas that offer the same unique services, customers are willing to pay a premium price for its products and services. In this scenario, Bath & Chill is following a A) product diversification strategy. B) liquidation strategy. C) broad differentiation strategy. D) focused differentiation strategy.
focused differentiation strategy
Jill is the CEO of Notes Etc., a stationery manufacturer. She decides to open up a retail store to sell her products directly to consumers instead of just selling wholesale to retailers. To do this, Jill will need to engage in A) forward vertical integration. B) backward vertical integration. C) horizontal integration. D) differentiation.
forward vertical integration
To be successful and to survive the shakeout stage of the industry life cycle, a firm should A) charge higher prices than its competitors. B) focus on product innovation rather than process innovation. C) gain economies of scale. D) shift from price to nonprice competition.
gain economies of scale
What is the term for the process of merging with a competitor at the same stage of the industry value chain? A) hierarchical integration B) horizontal integration C) cross integration D) vertical integration
horizontal integration
NoRu Inc. is a publicly traded firm that does not wish to be acquired by FRESHPoP Corporation, a much larger publicly traded firm, who is planning an acquisition of NoRu Inc. This is an example of a A) hostile takeover. B) friendly takeover. C) joint venture. D) strategic alliance.
hostile takeover
Each stage of the vertical value chain typically represents a distinct________ in which a number of different firms are competing. A) industry B) functional department C) economy D) customer segment
industry
According to the five forces model, which of the following is viewed as a major risk to a business pursuing a cost-leadership strategy? A) competition switching from non-price attributes to pricing B) innovation that allows competitors to emerge with more economical replacements C) new entrants with small production scale D) suppliers requesting a 2 percent price increase across the industry
innovation that allows competitors to emerge with more economical replacements
Which of the following lists the stages of the industry life cycle in the correct order? A) introduction, growth, shakeout, maturity, and decline B) introduction, shakeout, growth, maturity, and decline C) introduction, growth, maturity, shakeout, and decline D) introduction, shakeout, maturity, growth, and decline
introduction, growth, shakeout, maturity, and decline
Decisions relating to the range of products and services a firm will offer determine the firm's A) level of diversification. B) geographic scope. C) vertical integration. D) absorptive capacity.
level of diversification
Initech developed a superior touch screen technology for tablet computers that enabled multiple users to operate the screen at the same time. The technology was leased to Accent Technologies, a consumer electronics company, for five years. Which of the following alternatives to integration does this best illustrate? A) licensing B) franchising C) crowdsourcing D) bootlegging
licensing
Spotless Inc. outsources its production to contract manufacturers located in underdeveloped nations where unskilled labor is at very low wages is plentiful. This has helped the company become a price leader in the chemicals industry. Which of the following is the key driver behind Spotless Inc.'s strategic position? A) network effects B) superior customer service C) availability of complements D) low-cost input factors
low-cost input factors
When a firm pursues a(n)________ strategy, it continues to support marketing efforts even if the demand for the product is declining. A) exit B) consolidate C) maintain D) harvest
maintain
The primary goal of a firm pursuing a blue ocean strategy should be to A) create the highest perceived value in its respective industry. B) build a reputation of being the lowest-cost producer in its chosen industry. C) offer a differentiated product or service at a low cost. D) achieve a less steep learning curve.
offer a differentiated product or service at a low cost
Capabilities are the________ and managerial skills necessary to orchestrate a diverse set of resources to deploy them strategically. A) financial B) strategic C) organizational D) competitive
organizational
U.S.-based consumer electronics corporation DGM owns a smaller company in Taiwan where most of DGM's cell phone technology is made before being released worldwide. Which of the following alternatives to integration does this best illustrate? A) venture capitalism B) parent-subsidiary relationship C) joint venture D) franchising
parent-subsidiary relationship
Alphabet's Google made a string of acquisitions of new ventures, such as DeepMind, in order to A) imitate the actions of its competitors such as Apple and Facebook. B) solve its principal-agent problems. C) preempt rivals. D) expand through unrelated diversification.
preempt rivals
A value chain analysis consists of systematically analyzing a firm's key activities that for analysis purposes are categorized into two groups: A) primary activities and support activities. B) products and service activities. C) customers and suppliers. D) profits and losses.
primary activities and support activities.
The managers at Statholdings Mobile Inc. want to diversify the business by acquiring a consumer electronics company. This acquisition would mean increased job security, higher compensation, and greater decision-making authority for the managers. The managers correlate this acquisition to greater power for them rather than to the appreciation in shareholder value. In this scenario, this acquisition by Statholdings Mobile Inc. is most likely a result of A) time compression diseconomies. B) experience-curve effects. C) principal-agent problems. D) resource ambiguity
principal-agent problems
Customer service and________ are two of the value drivers that managers can utilize when trying to improve a firm's differentiation strategic position. A) product uniqueness B) experience curve C) cost of input factors D) economies of scale
product uniqueness
DreamHome operates in a number of countries and sells a wide variety of home goods, from garden furniture to kitchenware, to achieve continuous growth. From this data, we can conclude that DreamHome has been involved in A) product-market diversification. B) process diversification. C) strategic outsourcing. D) lean manufacturing.
product-market diversification
Which of the following is considered a limitation of employing the balance-scorecard framework? A) providing guidance about the right metrics to use B) accommodating both short- and long-term metrics C) designing and planning business processes D) translating the company vision into measurable goals
providing guidance about the right metrics to use
Plexzap Products started as a luxury brand for designer apparel. Soon, the company expanded by launching its own line of premium perfumes, watches, bags, and home furnishings. This expansion allowed the businesses under the company to share a few of the common competencies in products, services, technology, and distribution. Which of the following corporate strategies is Plexzap pursuing in this scenario? A) taper integration strategy B) niche marketing strategy C) related-constrained strategy D) related-linked strategy
related-linked strategy
Southwest Airlines (SWA) and Alaska Airlines (ASA) both compete in the same strategic group as low-cost, point-to-point airlines, but they draw upon different resource bundles. SWA's employee productivity tends to be higher than ASA's because the two companies differ in their human and organizational resources. This example best illustrates which of the following assumptions regarding the resource-based view? A) resource immobility B) resource allocation C) resource homogeneity D) resource heterogeneity
resource heterogeneity
Greener Cleener is a leading maker of environmentally friendly household cleaning products. Competitors across the globe have failed to imitate Greener Cleener's production models, supply chain systems, knowledge systems, and culture. These attributes have remained unique to Greener Cleener for a long time. Which of the following assumptions of the resource-based model of competitive advantage does this scenario best illustrate? A) resource homogeneity B) resource cost C) resource substitution D) resource immobility
resource immobility
Crocs, inventor of the iconic plastic clog, was unable to sustain its competitive advantage over its rivals because its key strategic resource was A) overly sophisticated marketing. B) not patented in a timely manner. C) simple to imitate. D) valuable in the eyes of the consumer.
simple to imitate.
Because Facebook receives almost all of its revenues from online advertising, we would conclude that it would be characterized as a(n)________ firm, which has the lowest levels of corporate diversification. A) single business B) dominate business C) related diversification D) unrelated diversification
single business
BuyNow Inc. is an e-commerce retail firm that sells a variety of merchandise online. Through services like cash on delivery, easy return, and online tracking, the company has created more customer value than its competitors (brick-and-mortar businesses) at the same price. Also, the company's costs are substantially lower than its competitors because of minimal investments in operation and administration. In this scenario, BuyNow Inc. has most likely been able to provide superior value and cost control through A) strategic parity. B) strategic profiling. C) strategic liquidation. D) strategic positioning.
strategic positioning
When a blue ocean strategy goes bad, a firm has neither a clear differentiation nor a clear cost-leadership profile. This situation is referred to as A) stuck in the middle. B) buried at the bottom. C) burned at the top. D) caught in the transition.
stuck in the middle
One of the risks of pursuing a blue ocean strategy is that a firm can find itself A) losing sight of its mission and vision. B) competing with only a differentiation strategy. C) stuck in the middle without a clear strategic position. D) ineffective when competing on an international scale.
stuck in the middle without a clear strategic position
The types of assets that are the primary focus of accounting data but are no longer most important to competitive advantage are A) market brand value. B) organizational culture. C) intangible. D) tangible.
tangible
Sanjay, owner of WashTubs, a washing machine company, is looking for an alternative to vertical integration. He decides to manufacture some of his own machine parts while keeping a few key suppliers in his industry value chain. This is known as A) a balanced scorecard. B) forward vertical integration. C) strategic offshoring. D) taper integration.
taper integration
Which of the following frameworks used to measure competitive advantage relies on both an internal and an external view of a firm? A) the economic value creation model B) the accounting profitability model C) the shareholder value creation model D) the balanced-scorecard model
the balanced-scorecard model
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 A) the horizontal integration activity changes the industry structure from oligopolistic to monopolistically competitive. B) the surviving firms will need to be protected against the increasing bargaining power of the suppliers. C) the horizontal integration activity has the potential to reduce competitive intensity in an industry. D) the surviving firms will need protection against the relaxed entry barriers.
the horizontal integration activity has the potential to reduce competitive intensity in an industry
A company that engages in strategic outsourcing reduces its level of A) vertical integration. B) taper integration. C) vertical market failure. D) credible commitment.
vertical integration
Decisions relating to the question of what stages of the industry value chain to participate in determine a firm's A) level of diversification. B) geographic scope. C) vertical integration. D) competitive strategy
vertical integration
Massive Dynamic Computers sources the components for its laptops from various suppliers on the market. The firm pays $100 for processors, $35 for disk drives, $50 for screens, $10 for memory, and $40 for graphics and wireless internet cards. Massive Dynamic has determined that it would cost $200 per unit to produce all of the necessary components in its in-house manufacturing facility. In this scenario, Massive Dynamic should A) continue to outsource production. B) vertically integrate. C) exit the laptop industry. D) diversify its activities.
vertically integrate
When does a merger between companies typically occur? A) when two firms of comparable size join to form a combined entity B) when large, incumbent firms buy startup companies C) when a target firm does not want to be acquired D) when two or more firms enter a temporary vertical strategic alliance
when two firms of comparable size join to form a combined entity
