Strategic Management Final
A unicorn is a private start-up that's valued at __________________.
$1,000,000,000
The success rate of mergers and acquisitions is roughly
30%
A company is considered to be a dominant business firm when at least _________ percent of revenues are generated by the dominant business.
70
According to the BCG matrix, a "cash cow" refers to an organization or subunit that has
A high relative market share in a low-growth market
Refer to the matrices below. Based on your readings and our class discussion, how might the recommendations for the companies (A & B) be the same/different across?
A's would always be top priority for investment; B's would always be divested.
_________________ encourage(s) managers to balance exploitation - applying current knowledge to enhance firm performance in the short term - with exploration - searching for new knowledge that may enhance a firm's future performance.
Ambidexterity
Bastillo Conglomerate is a Spanish paella company that is poised to enter the growing international market for the seafood-based treat. The fact that competition in Spain's paella market was incredibly intense suggests:
Bastillo will have a competitive advantage over its international competitors from less competitive markets
_______________________ is/are critical to effectively fulfilling a board of directors' governance responsibilities.
Board independence
Under ___________, a company giving to the community is a philanthropic and ultimately discretionary act, whereas under __________, it becomes integral to how the company competes.
CSR, CSV
Finding a way to sell to "bottom of the pyramid" customers, the billions of poor who make up the vast majority of the world's population is an example of "reconceiving markets" in the __________ approach to corporate ethics.
Creating Shared Value (CSV)
In a somewhat surprising move, Twitter decided to:
Double its character limit to 280.
The fact that Harley Davidson carries out its production function in the United States instead of the Canada makes it a Multinational Enterprise (MNE).
False
_____________________.is/was characterized by multinational enterprises (MNE's) essentially making small copies of themselves in a few key countries around the world.
Globalization 2.0
The advantages enjoyed through public stock company status include all of the following EXCEPT.
Guaranteed returns
In the latest example of a multinational firm behaving badly, ______________ admitted to faking quality data for the past 12 months resulting in the company shipping sub-standard copper and aluminum to auto makers and aircraft builders around the world.
Kobe Steel (Japan)
European financial markets and the Euro, itself took a hit this week on the news that:.
Over the continued objections of the Spanish government, Catalonia declared its independence after a referendum that saw 90% of Catalans supporting the secession.
_________________ represents the most integrated alliance along the Make-or-Buy Continuum.
Performing activities in-house
Apple and other smartphone makers are suing semiconductor maker ____________ over licensing agreements that are estimated to cost Apple alone over $2 Billion per year.
Qualcomm
Vice President Sherron Watkins is generally considered the whistleblower that brought down Enron. This is not entirely accurate because:
She never notified anyone outside of Enron.
Like the VRIO analysis, the Build, Borrow, or Buy framework tests resources on four characteristics, which includes all of the following except:
Substitutability
Which of the following accurately describes the preferred strategy for the Boston Consulting Group's business opportunities?
The preferred strategy for stars is growth through resource investment. b. The preferred strategy for dogs is retrenchment by divestiture. c. The preferred strategy for promising questions marks is growth, while the preferred strategy for less promising question marks is restructuring or divestiture. (All of the above).
Despite employing every strategy that it could think of to maintain its independence, Yonkers, Ltd. a small peanut brittle manufacturer was ultimately acquired by the major candy manufacturer Kabosh, Inc. This transaction would best be described as:
a hostile take over
In the Creating Shared Value model, bottom of the pyramid represents:
a target for expanding the customer base
In acquisitions, value generated usually goes to
acquirees
Hostile takeovers are most likely during
acquisitions
In attempting to enter the Chinese market, Tressel Tattoos, Inc. quickly realized that it could not afford the time it would take to build a manufacturing facility and customer base from scratch, but wanted to maintain complete control of its operations in China. Consequently, it was determined that TTI would enter the Chinese market through
acquisitions
Absence of colonial ties would represent ________________ distance in Ghemawat's CAGE framework.
administrative
A CEO's promise to always give the proverbial 110% on the job is easier for the Board of Directors to accept than it is for them to verify. The board must therefore deal with _____________ regardless of whether the CEO is capable, or not.
adverse selection
As we have repeatedly told you since you entered the Massey College of Business, more and more businesses are adopting work teams as a means of integrating efforts across functional areas. While this approach has many benefits, one significant downside is that it makes it more difficult to evaluate the efforts of individual team members (or lack thereof) thus increasing the likelihood and impact of ____________________.
adverse selection
According to____________, a firm is a nexus of legal contracts.
adverse selection theory
To determine the competitive advantage of nations, Porter suggested studying all of the following factors except:
all of the above should be studied (competitive intensity in focal industry, related and supporting industries, demand conditions, factor conditions)
Wal-Mart was able to build its supply chain into a competitive advantage in no small part because of the supply software it willingly shared with its suppliers, creating a retail link that seamlessly and instantly shares point-of-sale data with manufacturers. This investment in providing its partners supply chain and communication software would best be described as:
alliance manaement
________________ are the most visible part of an organization's culture.
artifacts
In organizing for use of a Global-Standardization strategy, a company would locate its R&D efforts _______, while its production would be located ______________.
at home, wherever it is cheapest
In response to the shift in buyer health consciousness, Coke and Pepsi expanded their beverage offerings to capture orange juice, bottled water, and sports drinks to prevent the loss of their current customers to these substitutes. This is an example of
backward integration
___ occurs when business acquires suppliers.
backward integration
Based on our discussion in class, it is clear that the __________________ of top managers is an important consideration in determining how best to structure an organization.
bounded rationality
According to Peters and Waterman's famous business book, "In Search of Excellence", corporate culture is one of the most powerful and sustainable sources of competitive advantage. In the ensuing decades since the book was published, however, companies wishing to benchmark and copy the successful cultures of their competitors have found it a difficult, if not impossible undertaking. The primary reasons for the companies' struggles are the __________ and _________ associated with corporate cultures.
causal ambiguity, social complexity
Companies pursuing a related diversification strategy are best served by a structure that promotes __________ among SBU's, while unrelated diversifiers should encourage inter-SBU ____________.
co-opetition, competition
A(n) _____________________ specifies how an organization expects its employees to behave while on the job
code of conduct
Non-equity alliances are based on __________ between firms.
contracts
As a customer, you are more likely to get quicker response time from a ___________ organization.
decentralized
The merger between American Airlines and US Airways, combined with earlier mergers between Southwest and AirTran and Delta and Northwest Airlines _________ in the industry overall.
decreased competitive intensity
______________ could be another name for synergy.
diversification premium
______________ are the savings that come from using the same competencies to produce two (or more) product/service lines.
economies of scope
For a public stock company, ___________ represent(s) the lowest level of the hierarchy of authority.
employees
In determining a mode of entry into an international market, the method that requires the least investment, but also offers the least amount of control is __________.
exporting
Increased traffic congestion and road wear near Nashville's new Music City center would be considered __________ associated with the management of the new facility.
externalities
Uber's primary business is providing transportation for people and things (meals?) that need it. While it fulfills its primary purpose quite effectively, some have argued that Uber also helps lessen traffic congestion, reduces drunk driving, and breaks the chain of poverty, all of which could be considered ___________ associated with Uber's business model.
externalities
All of the following are potential sources of value creation for related diversifiers except:
facilitating investments in specialized assets
Groupthink usually results in more creative organizational solutions to complex problems.
false
Single business firms do not have a corporate-level strategy
false
For years, Connie Tarner had been making her signature drill bits by hand and from memory. As demand for her product grew, so too did the number of people she had to employ to help grow her company. Connie also realized that she needed to provide new employees with detailed instructions and procedures in how to fashion the drill bits so that production could continue even when she was out of the shop. Eventually, the oral instructions became written standard procedures. In providing those SOP's, Connie increased the ____________ of her organizational structure.
formalization
Recently, both Coke and Pepsi decided to purchase the American bottling companies that mixed and distributed their respective brands. This move, which was a reversal of years of strategy, would best be described as
forward integration
__________ occurs when business acquires customers.
forward integration
After years of struggling to get additional grocery store shelf space to show off its many flavors, Haagen-Dazs decided to open its own ice cream shops to augment its grocery store presence. This decision to pursue both distribution channels simultaneously would best be described as:
forward taper integration
A company executing an International Global Strategy (as opposed to multi-domestic, global standardization, or transnational) would be expected to use a ____________ structure to execute it.
functional
As discussed the first day of class, the predominance of the ________________ organizational structure in business is reflected in the typical structure of business schools that include majors/departments like Marketing, Finance, and Accounting.
functional
According to Ghemawat's Distance Framework, the greatest "distance" between the United States and the United Kingdom would be_________.
geographic
__________________ is the most appropriate structure for a company executing a Transnational global strategy.
global matrix
Some argue that because of technology and other factors, the differences between different countries' consumer preferences and needs are decreasing and will eventually disappear altogether. As such, these folks adhere to the
globalization hypothesis
In attempting to enter the Chinese market, Tressel Tattoos, Inc. quickly realized that it could not find an existing host country factory that met its quality and security needs. Consequently, it was determined that TTI would have to build its Chinese production facility from scratch. This approach is expensive and risky, and is generally referred to as
greenfield operations
An organizational chart best reflects a company's
hierarchy
K-Mart's acquisition of Sears was considered:
horizontal integration
Reduction in competitive intensity is one of the advantages of
horizontal integration
Once a new strategy has been developed, Matrix, Inc.'s first step in implementation is the development of a budget that will set the financial parameters for decisions that will be made. According to Rothaermel, this budget represents a form of _______________.
input control
The GE Matrix represents an improvement over the BCG matrix because:
it allows a much richer, more detailed definition of industry attractiveness.
A ____________ is a standalone organization created and jointly owned by two or more parent companies.
joint venture
My company has decided to expand internationally and would like a moderate amount of both control and required investment. The most appropriate approach we could take to accomplish this would be:
joint venture
Vulcan, Inc., an American aggregates company and the Mexican real estate company Grupo ICA created and jointly owned the limestone mining company CALICA, which Vulcan eventually acquired in January of 2001. CALICA was founded as a
joint venture
A _________ occurs when a single investor or group of individuals buys, with the help of borrowed money (with the target company's assets as collateral), the outstanding shares of a publically traded company in order to take it private.
leveraged buyout
Dealing with foreign cultures, economic environments and greater distances are all part of the _________ that plagues all businesses that choose to pursue markets across borders.
liability of foreignness
Many American companies have located customer service call centers in India because the highly educated, English speaking, and relatively cheap workforce. In doing so, they are seeking:
location economies
The ________________ dimension of national culture was added to Hofstede's original four as a result of insights offered by Asian researchers; a reflection some suggest of the original study's Western cultural bias.
long term orientation
Vulcan, Inc., an American aggregates company and the Mexican real estate company Grupo ICA created and jointly owned the limestone mining company CALICA, which Vulcan eventually acquired in January of 2001 once Grupo ICA refused to share the additional costs of new ships CALICA needed to deliver the limestone to growing American markets. Vulcan was concerned with ______________ in this arrangement.
losing the learning race
One result of the recently-approved merger between American Airlines and US Airways should be:
lower costs
Ed Option has been CEO of J-Mart for the past seven years, during which the company consistently underperformed after he devised and executed a disastrous acquisition of competitor Stears. While the numbers for the fiscal year just ended indicate that J-Mart is falling further behind its current competition, Mr. Option insists that his plan will eventually turn the company's fortunes around and that he consequently should not be replaced at next month's Board of Directors' meeting. Given the evidence, Mr. Option's high opinion of himself is likely a reflection of:
managerial hubris
According to Pitney Bowes, ___________ acquisitions are preferable to ______________ acquisitions.
many small, one big
A company with relatively scarce human resources might consider a ______________ structure as a means to maximize the productivity of those resources.
matrix
Unity of command is a military principle that says that an individual should answer to only one boss at any given time. The ____________ organizational structure purposely violates the unity of command principle.
matrix
A(n) _______________ organization is better suited for successfully implementing a cost-leadership strategy.
mechanistic
Daimler-Chrysler and AOL-Time Warner are examples of _____________________ that went horribly wrong.
mergers
_________________ generally happen between companies of similar sizes.
mergers
Some feel that President Obama's decision to prevent the failure out certain banks and automobile manufacturers during the recession recovery by providing them publicly-funded loans set a bad precedent that increases the likelihood that large corporations today will engage in riskier behavior because of the__________ created.
moral hazard
In non-equity alliances, the _________ type of alliance, firms tend to share ______________ rather than _____________.
most common, explicit, tacit
he related and unrelated diversification associated with the mature stage of the organizational life cycle usually results in a _________________ structure.
multidivisional
If my company believes that the product we offer will have to be significantly altered for each international market we enter in order to make it attractive/useful to potential customers, we would be better off adopting a(n) ______________ strategy.
multidomestic
The most effective way to change an organization's culture is through:
new leadership
Lack of trust is a problem that often plagues and sometimes doom
non-equity alliances
Multinational corporations are constantly attempting to balance forces
of cost reduction and responsiveness
The greatest fear of those who originally opposed NAFTA was that American manufacturing jobs would be transferred to countries with much lower labor costs. For the most part, these fears were realized as many American companies had products manufactured in Mexico, China, India and other developing countries. This process of having the production stage of the value chain accomplished by another company outside of the U.S. is best defined as:
offshoring
A(n) _______________ organization is better suited for successfully implementing a differentiation strategy.
organic
Dave knew that if he wanted to keep his very competitive sales position and possibly earn the end-of-year bonus he was counting on to fund his Cancun getaway, he would have to meet the ambitious annual sales goals set by upper management. As such, the goals would be considered ____________ by Dave's company.
output controls
An organization is more likely to get effective oversight of top management with ___________________ directors than with ______________________ directors.
outside, inside
When Time, Inc. and Warner Brothers Studios first merged, there was a great deal of concern given their vast differences in corporate values, Time being a conservative publisher and Warner a hard-partying movie studio. Somehow the companies managed to stay together and overcome their _____________ issues.
partner compatibility
The United States has the greatest disparity in pay between top management and the lowest level workers. This would be a particularly difficult situation for German managers to deal with because that country scores lowest in Hofstede's ____________________ national culture dimension.
power distance
Mechanistic organizations function best in ______________.
predictable environments
The practice of giving managers stock in the companies they manage as part of their compensation is intended to overcome:
principal agent problems
Instead of making big decisions all at once, _______________ suggests breaking them down into smaller, sequential decisions.
real options perspective
Research findings suggest that the ____ level of diversification offers the highest level of performance.
related
Microsoft works with elementary and middle schools in economically depressed areas providing technology and education to underprivileged children with an eye towards increasing and improving their future employee base. This program would best be described as:
shared value creation
Milton Friedman is most closely associated with ___________.
shareholder capitalism
GoodCookie is a donut company that serves the greater Nashville Metropolitan market. The company has found success by selling a limited variety of donuts to a loyal customer base within roughly 25 miles of LP Field. If you were called upon to organize GoodCookie's 50 employees, you would best choose the _______________ structure as the company's most effective option.
simple
__________________ is an excellent tool for managing the bounded rationality problem faced by most top managers.
span of control
"Division of labor" is another way to say
specialization
Bob's Nutty Fudge Company was having trouble securing its required supply of high-quality walnuts. After much thought, the company decided to backward integrate and acquire Larry's Custom Nuts and its Crush-o-Matic 2000, a machine designed to crack and chop nuts in the ideal size and shape for high-quality fudge. While this will no doubt increase the overall efficiency of Bob fudge operations, it also increases the company's opportunity costs because
specialized assets
For a public stock company, ___________ represent(s) the highest level of the hierarchy of authority.
state charter
One way that corporations attempt to align the interests of the shareholders and the managers is through the use of ____________.
stock options
Joint ventures and long-term contracts are examples of:
strategic alliances
Executive compensation has been a controversial topic in the United States, where CEO pay sometimes dwarfs that of the common worker by a factor of 300. The responsibility for this disparity falls to ___________, who determine executive compensation.
the Board of Directors
According to _____________, the fact that Chinese labor is among the cheapest in the world does not alone guarantee it a competitive advantage on the international stage.
the death of distance hypothesis
Some argue that Communism in China will fail for the same reason that it did in Russia. With the increase in communications and travel, and the exposure to Western culture and lifestyles inherent therein, the values of the Chinese people are expected to evolve to reflect those of the rest of the world and the cultural difference that separated China and enabled Communism will soon be a thing of the past. People who hold this view are clearly believers in
the globalization hypothesis
In the Boston Consulting Group (BCG) matrix, Stars will evolve into Cash Cows as a result of:
the industry life cycle
In a strategic alliance, the firm that accomplishes its goals more quickly has the greatest incentive to end the alliance. This is a reflection of
the learning race
In the Enron movie, an observation was made that downfall of the company was the result of the fact that "the inmates (the traders) had taken over the asylum". The fact that these traders (and top management) were making decisions to benefit themselves in the short-term at the expense of the long-term viability of the company is an example of
the principal-agent problem
Adherents to __________________ believe that strategic alliances frequently hold critical resources and capabilities that individual firms may not be able to match.
the relational view of competitive advantage
Hofstede's original cultural dimensions, derived from survey data of 100,000 international IBM employees, includes all but:
time horizon
The costs specifically associated with the "make or buy" question when determining the scope of the firm are:
transaction
Acme, Inc. was exploring the possibility of outsourcing its distribution processes to FED-UP, a well-respected delivery company. After adding up the lawyers' fees for setting up the deal and the headaches involved in monitoring FED-UP's adherence to it, Acme decided it made more sense to continue doing distribution themselves. Acme's decision to internalize its distribution was likely the result of:
transaction costs
Large MNC's that operate in numerous international markets often face pressures to be both cost efficient and responsive. In order to respond simultaneously to these apparently opposing forces, many of these corporations adopt the ____________ strategy.
transnational
Of the four global strategies, _______ is the most difficult to execute effectively.
transnational
The willingness of Enron to exploit the new laws deregulating California's energy sector was a classic example of shareholder capitalism.
true
Some would argue that the ability of Kim Jong Un and his predecessors to keep the people of North Korea under their control, even in the most challenging times, is to no small extent the result of the Korean people's deep-seeded desire for stability, formal rules, and clear-cut understanding of what is expected of them. It should be no surprise, then that Korea scored highest on Hofstede's _______________ dimension of national culture.
uncertainty avoidance
Firms involved in ___________________ are primarily concerned with financial considerations of cash flow or risk reduction.
unrelated diversification