MQM 385 Sample Exam #1

A sustainable strategy is one that produces a competitive advantage that can be maintained over time.

False

A manager's only responsibility is to monitor and assess the performance of his or her firm.

False

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

False

Generally speaking, a firm will create value if its return on invested capital (ROIC) is less than the cost of capital.

False

Once a strategy has been formulated and implemented, it is important that the firm sticks to it no matter what happens.

False

One of Rolex's tangible resources is its well-known brand name and reputation for quality timepieces.

False

Strategic leaders spend the majority of their time working alone to devise new strategies.

False

The autocratic strategic management process exhibited by the former head of Apple, Steve Jobs, is best described as an emergent strategy.

False

A small coffee shop faces significant potential competition because of the low capital requirements compared with business environments such as universities and laboratories.

True

According to the resource-based view, a firm that differentiates itself from its competitors through its personalized approach to customer service is likely to sustain its competitive advantage for a long time.

True

According to the resource-based view, a firm that differentiates itself from its competitors through its personalized approach to customer service is likely to sustain its competitive advantage for a long time.

True

The core competencies of a firm are determined by the interplay of its tangible resources and intangible capabilities.

True

Under the strategy as a planned emergence model, even entry-level employees can help generate strategic initiatives.

True

A company's total asset based includes which of the following? a. Current assets, intangibles, and goodwill. b. Current and future assets. c. Future assets, plants, and property. d. Property, equipment, and liabilities.

a. Current assets, intangibles, and goodwill

Which of the following is a limitation of using accounting data to measure competitive performance? a. Accounting data focus mainly on intangible assets. b. Accounting data does not consider off-balance sheet items, such as pension obligations. c. Accounting standards are usually outdated. d. Accounting data are not available to the public.

b. Accounting data does not consider off-balance sheet items, such as pension obligations.

Yuki 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, Yuki is in _____ of the Level-5 leadership pyramid. a. Level 4 b. Level 2 c. Level 5 d. Level 3

b. Level 2

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

b. competitive advantage.

Companies in the same strategic group are _____ to each other. a. strategic allies b. direct competitors c. merger partners d. stakeholders or shareholders

b. direct competitors

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. Judging from the market conditions described in this scenario, which of the following statements is true? a. The industry structure will be far from perfect competition. b. Resource immobility of the firms will be low. c. Any advantage that one firm has will be short-lived. d. Barriers to entry within the industry will be high.

c. Any advantage that one firm has will be short-lived.

TriCorp is a major financial services corporation. With the CEO of TriCorp preparing to retire, several top managers are vying for the position. Jared considers himself to be a leading candidate. He not only has advanced degrees from business schools and more than a decade of experience working for TriCorp, but he also has personally ensured that his division has exceeded its performance benchmarks over the past three years, even though many of his employees are dissatisfied because they feel they are stagnating in their jobs. According to the level 5 leadership pyramid, why has Jared failed to exhibit the qualities of a level-5 leader? a. His actions do not match the organization's strategy. b. He lacks the organizational ability to accomplish the organization's goals. c. He is not able to help others reach their full potential. d. His individual skills are not well developed.

c. He is not able to help others reach their full potential.

Golden Harvest is a restaurant located inside a five-star hotel. It caters mainly to customers who are concerned about quality dining rather than the prices. In this scenario, which of the following will be a part of Golden Harvest's strategic group? a. a nearby fast-food restaurant b. a food kiosk in an adjacent subway station c. a premium rooftop restaurant in the same city d. a mobile food cart parked opposite to the five-star hotel

c. a premium rooftop restaurant in the same city

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

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

The availability of __________ has been suggest as a possible addition (a sixth force) to the Five Forces Model. a. resources b. capabilities c. complements d. substitutes

c. complements

Which of the following stages of the strategic management process involves an evaluation of a firm's external and internal environments? a. strategy implementation b. strategy formulation c. strategy analysis d. strategy control

c. strategy analysis

All of the following are typically organizational stakeholder groups, EXCEPT: a. Society b. Government c. Employees d. None of the above. They are all stakeholder groups.

d. None of the above. They are all stakeholder groups.

An employee lacking some of the innate abilities to be a top-level manager can still become an effective strategic leader through hard work and experience.

True

Which of the following statements is most true of the social responsibilities of a business? a. A firms ethical responsibilities go beyond its legal responsibilities. b. Shareholders mandatorily require a firm to perform its ethical and philanthropic responsibilities. c. Ethical companies will also be socially responsible. d. Most U.S. companies are legally responsible for voluntarily giving back to society.

a. A firms ethical responsibilities go beyond its legal responsibilities.

Which of the following best describes a Level 5 manager in the Level-5 leadership pyramid? a. Asoka is the CEO of Green Machines Inc.; he has helped his company in gaining and sustaining a competitive advantage through ethical decision making. b. Connie is an employee who just started her career at DK Inc.; she has already been appreciated for her knowledge and skills in the new company. c. Dmitri is an employee at Infinite Circle Inc.; he has helped his team achieve their targets by contributing to the teams efforts. d. Luigi is part of the marketing team at RT Corp.; he has been given the charge of managing a team of three, so he will be promoted to a manager's position next month.

a. Asoka is the CEO of Green Machines Inc.; he has helped his company in gaining and sustaining a competitive advantage through ethical decision making.

Trung has been an employee with PureEnergy Inc. for 15 years. He started with an entry-level job, and today he is a manager of an entire division. Over the years, Trung has acquired a reputation for doing the right things in the company. Hence, as an efficient leader, he is capable of effectively communicating and motivating his subordinates to work toward the company's vision and mission. According to the Level-5 leadership pyramid, which is the highest level of leadership Trung has reached so far? a. Level 4 b. Level 2 c. Level 3 d. Level 5

a. Level 4

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

a. Strategic management

Which of the following is the best characterization of sociocultural forces? a. a society's culture, norms, and values b. a focus group's culture, norms, and values c. a firm's culture, norms, and values d. a competitor's culture, norms, and values

a. a society's culture, norms, and values

The CEO of Chyron Media has decided to enter the markets of emerging nations like China and Brazil. This means that the books, magazines, and websites published under the Chyron Media banner would be made available in these nations. Which of the following strategies does this scenario best illustrate? a. corporate strategy b. divisional strategy c. business strategy d. functional strategy

a. corporate strategy

Jamie is a manager in an industry that has a few large players and that has remained relatively stable over the past few years. He finds out that legislators are proposing new laws to deregulate the industry. If the laws pass, which of these scenarios will Jamie most likely face? a. many new competitors b. technological innovation c. the end of globalization d. across-the-board price increases

a. many new competitors

To reduce the amount of time it takes to apply packaging to its finished products, North Star Foods is implementing new equipment at its production plants. By doing this, North Star is addressing a _____ in the value chain analysis. a. primary activity b. secondary activity c. support activity d. premier activity

a. primary activity

Dynamic capabilities are especially relevant for surviving and competing in markets that a. shift quickly. b. shift slowly. c. remain constant. d. remain unpredictable.

a. shift quickly

A high percentage of R&D/Revenue ratio indicates a(n) a. strong focus on innovation to improve current products and services. b. strong focus on marketing and sales to promote products and services. c. negligent investment toward research and development. d. inefficiency in the management to focus on new products.

a. strong focus on innovation to improve current products and services.

A firm's strategic position is likely to be strong when a. the gap between the value the firm's product generates and the cost to produce it is large. b. all the five forces in Porter's model are strong. c. its suppliers and vendors can easily forward integrate and buyers can backward integrate. d. the entry barriers within the industry it operates in are low and the exit barriers are high.

a. the gap between the value the firm's product generates and the cost to produce it is large.

The primary objective of Porter's five forces model is to a. understand the profit potential of industries. b. break down a firms value chain activities into primary and support. c. reduce the gap between the value of a firms product and its cost of production. d. understand valuable, rare, and hard-to-imitate resources.

a. understand the profit potential of industries.

Ray-Ban sunglasses, for example, have been a leading brand of eyewear since the 1930s. Although the company has countless imitators and stiff competition in the luxury eyewear market, it has retained its leadership position for most of its existence. Ray-Bans iconic designs and commitment to high- quality materials are certainly contributing factors, but it remains unclear why consumers continue to prefer Ray-Bans to other brands offering similar styles and materials. This _____________________ makes it exceedingly difficult for other firms to capture part of Ray-Ban's market share. a. emergent strategy b. causal ambiguity c. cognitive bias d. scenario approach

b. causal ambiguity

Threadless allows customers to submit their own designs and to vote on which designs they would like to see printed on a T-shirt. This business uses a _____ technique. a. offshoring b. crowdsourcing c. peer-to-peer d. binge watching

b. crowdsourcing

Although True Ion Inc. and One Electro Inc. operate in the same consumer electronic industry, True Ion Inc. has better sales and brand equity. This is attributed to True Ion Inc. s commitment to innovation. The company has adequate financial and human capital to invest in research and development, an area in which One Electro Inc. lags behind. In this scenario, which of the following critical assumptions of the resource-based view of a firm has been illustrated? a. resource imitation b. resource heterogeneity c. resource immobility d. resource value

b. resource heterogeneity

The _____ allows the scanning, monitoring, and evaluating of changes and trends in a firm's macro environment. a. BCG matrix b. VRIO framework c. PESTEL framework d. SWOT analysis

c. PESTEL framework

Which of the following is an example of competitive parity? a. A firm provides wall clocks that its consumers value more than other wall clocks. b. A firm sells wall clocks at a lower price than its competitors. c. A firm manufactures higher-quality wall clocks than its competitors. d. A firm produces a similar number of wall clocks at a similar cost as its competitors.

d. A firm produces a similar number of wall clocks at a similar cost as its competitors.

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

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

_____ is best described as a set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors. a. Credo b. Behavior modification c. Competency management d. Strategy

d. Strategy

Corporate executives at LikeReal, Inc. decide to compete in the remote model airplane industry by making the largest model planes available. By doing this, they completed part of their a. implementation strategy. b. functional strategy. c. corporate strategy. d. business strategy.

d. business strategy.

During an AFI planning session, the managers of the Fukuhara Motorcycle Corporation decided to place various stages of production in different countries in order to implement the strategy of cutting overhead costs. By doing this, what issue did the firm address? a. philanthropic strategy b. business ethics c. corporate governance d. organizational design

d. organizational design

Brain Boost Inc. is a leading educational toy company. Competitors across the globe have failed to imitate Brain Boost's production models, supply chain systems, knowledge systems, and culture. These attributes have remained unique to Brain Boost Inc. 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 substitution c. resource cost d. resource immobility

d. resource immobility