MGT4750 - Exam 2

Many financial service firms, IT firms, and health care companies are among the most active when it comes to ______, which occurs when value chain activities are taken care of outside the home country of the firm.

offshore outsourcing

Which of the following examples uses a focused differentiation strategy?

a cosmetics brand that offers superior skin lotion for sensitive skin priced at 100 dollars per bottle

Which of the following is a part of Geert Hofstede's cultural dimensions?

power distance

Which of the following countries has a high geographic distance but a low cultural distance from the United States?

Australia

One of the disadvantages of GM's focus on its Chinese market is

Chinese government-supported domestic car makers are able to initiate a cutthroat price war.

Victoria's Jewelry Inc. is considering a takeover of its competitor, Ace Diamond LLC. In general, Victoria's should go ahead with the acquisition as long as Ace Diamond is more valuable as a continued standalone company than it would be inside Victoria's.

False

Which of the following is primarily a value driver?

complements

According to the five forces model, which of the following is viewed as a major risk to a business pursuing a cost-leadership strategy?

innovation that allows competitors to emerge with more economical replacements

What causes the winner's curse?

overpaying for an acquisition

The process of alliance management begins with

selecting the best possible partner

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

stuck in the middle

The Hershey Company, the largest U.S. chocolate manufacturer, decided to enter the Chinese market because

the U.S. population was growing slowly and becoming more health consciouss

Which of the following is an example of an external transaction cost?

the cost of searching for a contract manufacturer

Due to the dynamic nature of business competition, a firm's strategic position should remain fixed over time.

False

When a firm is able to successfully employ a blue ocean strategy, it will create a competitive advantage by

(NOT SURE) beating rivals on product attributes while offering a better price (DEF WRONG) using a first-mover advantage to be the lowest price in the market.

How has China been affected by its one-child-per-family policy and appreciation of its currency? A. The purchasing power of its workforce has reduced. B. The value added to production has reduced. C. The standard of living within the economy has lowered. D. The country's advantage in low-cost manufacturing has reduced.

The country's advantage in low-cost manufacturing is now reduced

A _________ primarily details the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market.

business-level strategy

When two neighboring, democratic countries that are part of a trading bloc follow different religions and social norms, they most likely have high ________ distance.

cultural

Blue Cat Inc., a manufacturer of high-technology medical devices, has its product development centers located in the United States and South Korea. The manufacturing units are located in China and the Philippines to benefit from low labor costs and access to original equipment manufacturers. This allows the company to competitively price its devices. Also, the various phone models sold by the company are uniform in all the foreign markets it operates in. In this scenario, which of the following strategies does Blue Cat most likely pursue

global-standardization strategy

Bayside Inc., a reputed brand for fine art supplies, is implementing an international strategy. Cyberdyne Corp., a maker of mini-computer tablets, is pursuing a global-standardization strategy. Which of the following statements most likely holds true in this scenario?

Cyberdyne Corp. focuses more on cost-reductions when compared to Bayside Inc.

While Eye Windows incurs a cost of $12 for a pair of eyeglasses, Dura Frames, its competitor, manufactures a pair of glasses at $10. Both the companies are able to sell their glasses for a maximum of $30 per pair. Which of the following statements is true in this scenario?

Eye Windows and Dura Frames have achieved differentiation parity.

Corporate strategy is focused solely on determining the geographic locations in which the firm should compete

False

Plexzap Sodas has been a market leader in the soft drink industry for several decades. However, its market research shows that consumer tastes have begun to shift to sugar-free flavored seltzer waters, a product that Plexzap is capable of producing with minimal changes to its facilities and production processes. Based on your knowledge of the core competence-market matrix, which diversification strategy should Plexzap pursue?

Redeploy and recombine existing core competencies to compete in markets of the future

Managers at Umbrella Corporation, a firm in East Asia, want to make their company a global leader in business process outsourcing (BPO). What should the Umbrella managers look for as they decide where to locate their BPO facilities

an abundance of well-educated English speakers

Gr8t Food is a chain of "fast casual" restaurants that sells its menu items at higher prices than its competitors. The restaurant has a large customer base due to its wide product portfolio and superior customer service. Which of the following generic business strategies has Gr8t Food adopted in this scenario?

differentiation

Horizontal integration through mergers and acquisitions can help firms strengthen their competitive positions by increasing

differentiation

Sirius Cybernetics Inc. has a national competitive advantage in the pharmaceutical industry. This means that the country

is a world leader in the pharmaceutical industry.

Which of the following statements accurately explains the primary reason behind Walmart's failure in Germany?

significant differences between its U.S. personnel policies and Germany's culture

Mark owns Drones 'R' Us, Inc. and is looking for an alternative to vertical integration. He decides to manufacture some of his own parts while keeping a few key suppliers in his industry value chain as well. This is known as

taper integration

The pursuit of both differentiation and low cost at the same time in a way that creates a leap in value for both the firm and consumers is called

value innovation