Strat final

When a firm operates at an output level of 9,000 units, the per-unit cost is $5. When the production is between 10,000-12,000 units, the per-unit cost is $4. At a production level of 13,000 units, the production cost is again $5 per unit. At 14,000 units and above, the production cost increases further. At what output level does the firm experience economies of scale?

11,000 units

Which of the following most accurately describes a difference between incremental innovation and radical innovation?

Incremental innovation builds on an established knowledge base; radical innovation uses an entirely different knowledge base

Danish manufacturer Vestas is addressing concerns regarding the burning of fossil fuels to generate energy by building wind turbines. This best represents which of the following PESTEL categories?

environmental/ecological

ezTV, a consumer electronics company, is the leading manufacturer of high-definition (HD) LED televisions. HD technology has been its core competency and the company holds 60 percent shares in that market. However, ezTV's competitors have now begun to produce more-advanced technologies like 4K Ultra HD and Internet-enabled Smart televisions. According to the dynamic capabilities perspective, what should ezTV do?

ezTV should start working on Ultra HD and Smart television technologies to adapt its core competency to suit the external environment

Although Dynatrace Holdings still sells its DVD players, a product in its decline stage, the investments made by the company on improving or marketing the product are very low. The company has allocated the least amount of human and financial capital to this department. Which of the following strategies has Dynatrace Holdings adopted in this scenario?

harvest strategy

The broad question that business-level strategy answers is________ the firm will compete

how

BellRing Brands is a manufacturer of educational toys for children. Six months ago, the company's research and development division came up with an idea for a unique touchscreen device that can be used to introduce children to a number of foreign languages. Three months ago, the company produced a working prototype, and last month the company successfully launched its new device on the commercial market. What should the managers of BellRing Brands prepare for next?

increased competition from imitators

Due to its large sales volume and low-cost structure, Bunny's Lo-Cost enjoys a cost-leadership position. Which of the following scenarios might threaten Bunny's competitive advantage?

A new competitor is perceived to provide similar value while offering better service than Bunny's

Bigger & Better Inc. is a big-box retailer in direct competition with Walmart and Target. Bigger & Better Inc. initially tried to respond to Walmart by cutting its prices and reducing costs. Walmart has greater buying power and a more efficient supply chain; therefore, Bigger & Better Inc. was not able to compete on costs. The company then tried to differentiate itself by signing a celebrity to create an in-house line of clothing. However, Target has a celebrity clothing line that has a more differentiated appeal. The economic value created by Bigger & Better Inc. is currently less than Target and Walmart. It can be said that

Bigger & Better Inc. is "stuck in the middle" and has a competitive disadvantage

On which of the following tenets is the crossing-the-chasm framework, suggested by Geoffrey Moore, based?

Each stage of the industry life cycle is dominated by a different customer group

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.

False—competitive advantage is only achieved by generating above average returns, relative to competition. True—competitive advantage is achieved since Tony has a positive net income. False—Tony more than likely has a sustained competitive advantage since he's been in business longer. True—competitive advantage is achieved through profitability alone.

What must a cost-leadership strategy accomplish to be successful?

It must reduce the firm's cost below that of its competitors while offering adequate value

Which of the following best explains why a blue ocean strategy is difficult to implement?

It requires the reconciliation of fundamentally different strategic positions—differentiation and low cost

As the strategic manager of AlwaysSharp art knives, you are tasked with producing a strategy for introducing a new line of premium knives. Your competitor produces a line of similar art knives at a cost of $1 and sells them for $5. Because your company has inferior production capabilities, your knives will cost $2 each to produce. However, your handle is proven to be more comfortable than your competitors'. Assuming you are guaranteed to sell the same number of units as your competitor, which of the following strategies is most likely to achieve a competitive advantage?

Market AlwaysSharp art knives as a higher-quality alternative and sell them for $7.

Mohawk is a leader in sustainable and innovative carpeting and floorings, as evidenced by its signature product, the world's first organic cotton carpet. Its product is unique and has appealing customer attributes. If Mohawk's raw material costs increased by 12 percent this year, what would be the likely outcome?

Mohawk would pass a major portion of this increase along as a price increase to its customers

Fatima is the owner of a remodeling company that caters to a very wealthy clientele. Her company has struggled to differentiate itself from the other high-end remodelers in the area, but because she has hired several expensive but highly qualified team members, Fatima is unable to shift to a cost-leadership strategy. Which strategy is most likely to achieve a competitive advantage?

Narrow the scope of competition and focus on unique features such as using premium materials

Toy sales have declined by 10 percent each year, forcing many retailers to exit the industry. To eliminate its remaining competition, Terrific Toys sells all of its product at a loss and relies on its significant cash holdings to cover costs until its competition is forced to exit the industry. Is this an example of a successful strategy? Why or why not?

No. Bargain's strategy and competitive advantage are unsustainable.

Roberta is interested in the concept of strategy and decides to create her own. As a result, Roberta says that her strategy is to focus on competitive benchmarking to achieve competitive advantage. Which is the best evaluation of Roberta's statement?

Roberta should reevaluate her statement because it fails to meet the principles of what a strategy should be.

Juana, a manager at a multinational organization, is trying to carefully scan and link the firm's internal environment to its external environment. The insights from this analysis will allow her to effectively leverage the company's internal strengths to exploit external opportunities, while mitigating internal weaknesses and external threats. In this scenario, which of the following managerial tools is Juana employing?

SWOT analysis

When conducting a________ it's best to examine both PESTEL and Porter's five forces analyses because these tools focus on the external environment.

SWOT analysis

Which of the following scenarios best exemplifies a platform business?

Samantha operates an industrial test kitchen in which local growers bring their produce to local chefs, who use the kitchen to try new recipes and determine which produce to buy

Which of the following is an element of good strategy?

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

GoGadget Inc., a manufacturer of multiuse tools, supplies its products to Hardware Harry's, a home improvement retail chain. GoGadget demands that Hardware Harry's create more shelf space in its stores for its products. However, Hardware Harry's refuses to do this. Instead, it decides to produce its own range of multiuse tools with its own label "Harry's Helpful Tools." In this scenario, Harry's Hardware has exercised its bargaining power as a buyer through

backward integration

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

beating rivals on product attributes while offering a better price

In the multiplex industry, Home Again Movies Inc. is an upscale multiplex that focuses on superior customer experience. The firm charges premium prices for its movie tickets and services. Movies-for-Less Inc., in contrast, charges the lowest price in the industry with its no-frills approach. In between these two segments is Just Right Films Inc., which offers a customer experience comparable to that of Home Again Movies at a price almost as low as that of Movies-for-Less. What strategy is Just Right Films pursuing in this scenario?

blue ocean strategy

OpenBook is a new online bookseller's market that has raised capital from multiple sources. It is planning to use its capital to acquire certain assets. Which of the following assets will be the most difficult for OpenBook to acquire using its capital?

brand equity

If French Provincial Decor LLC obtains an 18 percent return on invested capital, which of the following will help determine if it has a competitive advantage over other furniture companies?

comparing the return to the return on invested capital obtained by other firms in the industry

In the Five Forces model developed by Michael Porter,________ is not defined narrowly as a firm's closest rivals but rather more broadly to include other factors in an industry, such as buyers, suppliers, the potential new entry of other firms, and the threat of substitutes.

competition

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?

cost leadership

Skin Science Inc. produces a line of skincare products that it sells at higher prices than its competitors. The company has a large and loyal customer base due to its unique formulations, high-quality ingredients, and superior customer service. Which of the following generic business strategies has Skin Science adopted in this scenario?

differentiation

When Japanese carmakers entered the existing U.S. automobile market by first offering small fuel-efficient cars and then leveraging their low-cost and high-quality advantages into high-end luxury segments, they were engaging in

disruptive innovation

The type of customers vital to a firm introducing a new innovation are the________, who are willing to buy early into new technology or product concept.

early adopters

As a research scholar, Danna researched and developed her idea of solar roof shingles. Realizing the potential use of this product in both residential and commercial building development, she started a new venture where she could customize these shingles to fit the specific needs of the buyers and sell them. Danna can be best described as a(n)

entrepreneur

Bellissima Beauty is a cosmetics manufacturer. It has released an improved version of its wrinkle-reducing night cream in markets in which the company already operates. Which of the following types of innovations does this scenario best illustrate?

incremental innovation

Snow Beast Equipment initially spent 10 worker hours to assemble each snow blower. However, as unit production doubled, the number of hours spent on assembling a snow blower decreased by 20 percent. This increase in productivity reduced the company's cost per unit. What is this phenomenon referred to as?

learning-curve effect

UShredIt! has entered a stage in which the demand for their innovative document shredding machines has declined. Now most customers are buying replacement parts or buying their second shredding machine from the firm. What stage in the industry life cycle does this scenario describe?

maturity stage

WeBreak4Bikes Inc. has a new U.S.-based client in the bicycle industry. The client's company produces only bicycles for riding on the road. The bicycles are used for reliable general-purpose transportation. When asked to identify a potential substitute for the bicycle industry from the five forces perspective, you would select

motorcycles

After social networking websites were introduced, their value increased exponentially as the number of users increased. This is the positive effect of a(n)

network effect

A radical innovation leverages________ markets, while incremental innovations are based on________ markets.

new; existing

The primary goal of a firm pursuing a blue ocean strategy should be to

offer a differentiated product or service at a low cost

A(n)________ industry is one that is characterized by many small firms, a commodity product, and little or no ability for each firm to raise its prices.

perfectly competitive

Activate Equipment Inc. has been successful at differentiating itself from competitors by claiming a premium price for its treadmills based on integrated HD displays, workout tracking capabilities, and advanced technology. In this scenario, which of the following is the key value driver?

product features

Golden Soles has been successful at differentiating itself from competitors by claiming a premium price for its athletic footwear based on superior design and high-quality materials. In this scenario, which of the following is the key value driver?

product features

Although eHook and eFury operate in the same consumer electronic industry, eHook has better sales and brand equity. This is attributed to eHook's commitment to innovation. The company has adequate financial and human capital to invest in research and development, an area in which eFury lags behind. In this scenario, which of the following critical assumptions of the resource-based view of a firm has been illustrated?

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?

resource immobility

Mama Mia's' Pizza & Calzone has been trying to directly copy the strategies of Fuhgeddaboudit Pies. Even though it is evident that the success of Fuhgeddaboudit Pies comes from the freshness and variety of ingredients it uses, Mama Mia's has not been able to introduce the same types of produce into its recipes. This is because Fuhgeddaboudit's network of relationships with local growers, as well as its efficient supply chain, are very difficult to emulate. Which of the following barriers to imitation does this scenario best illustrate?

social complexity

In recent years a growing number of U.S. consumers have become more health conscious about what they eat. According to the PESTEL Framework this trend could best be classified as a________ trend.

sociocultural

If a company wants to gain a competitive advantage in a highly competitive industry, it should ideally

stake out a unique position within the industry.

Sean, a retired CEO, invests capital in a start-up company that creates budgeting software. He mentors the entrepreneur and the employees of the company because he wants the company to perform well and survive in the market. Thus, Sean is the start-up company's

stakeholder

John is a bit confused about the difference between stakeholders and stockholders. You meet with John and inform him that the main difference is that

stakeholders can be both internal and external while stockholders own shares of a firm and are classified as internal to the firm.

When a firm uses the tools and concepts learned from strategic management in order to achieve competitive advantage by pursuing innovation, it is said to be engaging in

strategic entrepreneurship

Dazzle Lighting was the first company to start selling LED light bulbs in its country—a product that gained popularity among diverse groups. Soon, other companies started to sell their own brands of LED bulbs, thereby giving Dazzle Lighting ample competition. In response, Dazzle Lighting decided to limit its LED light bulbs to outdoor models. However, it ensured that these models were the longest-lasting and lowest-priced on the market. With this innovation, Dazzle Lighting consistently outperformed its competitors for ten years. In this scenario, Dazzle Lighting maintained a________ through its innovative strategy

sustainable competitive advantage

Dazzle Lighting was the first company to start selling LED light bulbs in its country—a product that gained popularity among diverse groups. Soon, other companies started to sell their own brands of LED bulbs, thereby giving Dazzle Lighting ample competition. In response, Dazzle Lighting decided to limit its LED light bulbs to outdoor models. However, it ensured that these models were the longest-lasting and lowest-priced on the market. With this innovation, Dazzle Lighting consistently outperformed its competitors for ten years. In this scenario, Dazzle Lighting maintained a________ through its innovative strategy.

sustainable competitive advantage

STRIKEBYTE is a software company that has created and acquired numerous assets over the years. According to the resource-based view of a firm, which of the following assets of STRIKEBYTE will best enable it to gain and sustain a competitive advantage?

the expertise acquired by the employees in the company

A blue ocean strategy differs from a low-cost strategy in that

the intent of a blue ocean strategy is not to be the absolute lowest-cost provider because a blue ocean must also increase perceived value

The internet service provider industry in the country of Wakanda is an industry characterized by the presence of strong network effects, high brand loyalty, high economies of scale, and proprietary technology among incumbent firms. Thus, in the internet service provider industry, the

threat of new entrants is most likely low.

For a firm that operates in an industry where competition is high, which of the following practices will result in inferior performance?

trying to be everything to everybody by combining different competitive strategies