Strategic Test 1

When a firm manufactures 2,000-3,000 units of a product, it incurs an average cost of $10 per unit. When it manufactures 3,000-4,000 units of the same product, the average cost per unit reduces to $7. However, manufacturing beyond 4,000 units will raise the average cost per unit to $9. Which of the following is the firm's minimum efficient scale?

3,000-4,000 units

In 2008, BlackBerry's market cap peaked at $75 billion. By 2015 this valuation had fallen more than 90 percent, to less than $7 billion. BlackBerry fell victim to two important PESTEL factors in its external environment: sociocultural and technological. How did technology contribute to BlackBerry's decline?

BlackBerry failed to change its device into one that could perform multiple tasks effectively

Both Viten Electronics and JL Electronics Inc. incur a cost of $400 to manufacture a LED television. However, the economic value created by JL Electronics is more than that created by Viten Electronics. What does this indicate?

JL Electronics can charge a premium price on its televisions

Jorge 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 teams objectives. Thus, Jorge is in _______ of the Level-5 leadership pyramid.

Level 2

___________ describes a process in which the options one faces in a current situation are limited by decisions made in the past.

Path dependence

While Burger Cult Inc. operates in a monopolistically competitive industry, Citizen Telecom Inc. operates in a monopoly. Keeping this information in mind, which of the following statements is most likely true?

The threat of new entrants will be higher for Burger Cult Inc. than Citizen Telecom Inc.

Why are differentiation and cost-leadership strategies referred to as generic business strategies?

They can be used by any organization independent of industry context.

True Help is a nonprofit organization that works toward rehabilitating the homeless. The credo of the organization is the "help us help you". For an organization like True Help, which of the following statements would make an appropriate mission?

We help the homeless gain and sustain financial independence by providing employment opportunities

Beans Inc. operates in a perfectly competitive agricultural industry. Classica Apparel Inc., in contrast, operates in a monopolistically competitive industry. Keeping this information in mind, which of the following statements is true?

While Classica Apparel Inc. will have the power to set the prices for its products, Beans Inc. will have little or no ability to do so.

Which of the following scenarios illustrates a firm that has a sustainable competitive advantage?

Zhang Corp. was able to hold its market share of 68 percent in the social networking industry for more than three years

Which of the following strategies best illustrates a generic business strategy?

a decision to niche market the jewelry sold by a company while the apparel division under the same company sells its products through mass marketing

Which of the following is the most accurate description of stakeholder impact analysis?

a decision tool with which managers can recognize the needs of different stakeholders

Which of the following is an accurate description of a Level 1 manager?

a highly capable individual who makes productive contributions through motivation, talent, knowledge, and skills

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 premium rooftop restaurant in the same city

Which of the following summarizes the difference between a firm's vision and mission?

a vision states what a firm wants to accomplish; a mission states how a firm plans to accomplish this vision

The US government legitimized claims by thousands of businesses and individuals in the aftermath of the BP oil spill in the Gulf of Mexico, causing the claims to become of great urgency to BP. This best represents the process of

addressing stakeholder concerns

The perfectly competitive industry structure differs from the resource-based model in its view that

all firms have access to the same resources

A key feature of an oligopoly is that the competing firms

are interdependent

When internet service providers offer free routers for subscriptions to their wireless Internet packs, the perceived value of the service offering increases. In this case, the value driver would be

availability of complements

Which of the following factors best contributes to the US automative industry being characterized by high entry barriers?

car manufacturers require large-scale production in order to be cost-competitive

A firm that achieves superior performance relative to other firms in the same industry or the industry average has a(n)

competitive advantage

Which of the following summarizes the difference between corporate strategy and business strategy?

corporate strategy deals with where to compete; business strategy deals with how to compete

Home Smart Inc. is a chain of supermarkets that sells its products at higher prices than its competitors. Yet, the supermarket chain has a large customer base due to its wide product portfolio and superior customer service. Which of the following generic business strategies has Home Smart adopted in this scenario?

differentiation

A firm experiences __________ when there are increases in costs per unit as output increases.

diseconomies of scale

With regard to the VRIO framework, Crocs Shoes was unable to sustain its competitive advantage primarily because its products were

easy to imitate

Which of the following is not an example of a black swan event?

exit of President Barrack Obama from presidency

Which of the following is an accurate statement about the relationship between firm effects and industry effects?

firm effects deal with a manager's actions; industry effects deal with external circumstances

Creating resources that meet the VRIO criteria is strategically important to a firm because it

helps the firm to gain and sustain a competitive advantage

Beats Electronics has been able to outperform Audio-Technica, Bose, JBL, Skullcandy, Sennheiser, and Sony in the high-end, premium headphone market. Which of the following statements accurately explains one of the main reasons for the success of Beat?

it created a perception that owning its products was cool

Intangible assets add great value to a firm primary because the firm's

knowledge and culture take time to develop and are generally difficult to imitate

Bass Watches Inc. initially spend eight man-hours to assemble a wristwatch. But as the production doubled, the number of hours spent on assembling a watch reduced by 20 percent. This increase in productivity reduced the company's cost per unit. What is this phenomenon referred to as?

learning-curve effect

The government of Filvia has mandated that the standard minimum wage in the country be increased to $8,000 per year. This has ensured that all firms in the country pay their employees at least $8,000 per year, which has brought about a higher standard of living for the people of Filvia. Which of the following factors in a firms general environment does this mandate best indicate?

legal factors

Strategic commitments are actions that are

long-term oriented

Juanita Apparels Inc. outsources its production to contract manufacturers located in underdeveloped nations where unskilled labor is available in plenty for very low wages. This has helped the apparel brand become a price leader in the industry. Which of the following is the key driver behind Juanita Apparel's strategic position?

low-cost input factors

Pure Carat Inc. is a company that sells 24-carat gold biscuits to companies that manufacture jewelry. Since the company operates in an industry where many other suppliers sell standardized products, it can most likely

only achieve competitive parity

During an AFI planning session, the managers of the Fukuhara Motorcycle Corporation decided to place various stages of production in different countries. By doing this, what issue did the firm address?

organizational design

The management of Wong Industries showed a commitment to _________ by increasing the salary of many female employees to meet its goal of having equal pay for women and men who perform comparable work.

organizational values

During periods of high industry growth

price competition among firms frequently decreases

The "Gold Crisps" potato wafers manufactured by the True Foods Inc. have been the highest selling wafers in the market. Though the market for wafers is flooded with competitors, True Foods Inc. has been able to maintain its market position for a long time. This is mainly attributed to the unique taste of the wafers that comes from the unique natural flavoring used by the company. This competency of True Foods Inc. will be considered as a(n) ____________ resource in the VRIO framework.

rare

The resource-based view of a firm assumes that the

resource bundles of firms competing in the same industry are unique to some extend and thus differ from one another

As a result of ________, a critical assumption in the resource-based model of a firm, the resource differences that exist between firms are difficult to replicate

resource immobility

The CEO of Sam's Club, Rosalind Brewer, reports to Walmart's CEO, C. Douglas McMillon, who as corporate executive oversees Walmart's entire operations. Sam's Club, therefore, is a ______ of Walmart.

strategic business unit

When a firm makes choices between a cost or value position to achieve competitive advantage, it is primarily involved in

strategic trade-offs

Which of the following stages of the strategic management process involves an evaluation of a firms external and internal environments?

strategy analysis

Which of the following stages in the AFI strategy framework involves designing a business, corporate, and global strategy?

strategy formulation

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

First Ledger Inc., an auditing company, replaced its existing accounting software with new accounting software from another supplier. Since the new software has different features and abilities, First Ledger Inc. has had to spend $10,000 on training its employees to use it. In this scenario, $10,000 represents First Ledger Inc's

switching cost

The management of a company is assessing the value of all the tangible resources the company owns. Which of the following will be included in this assessment?

the company's machinery

During strategy implementation, managers primarily focus on deciding the

type of corporate governance that is most effective and ways in which it can put the formulated strategy into practice

The __________ is a conceptual framework that views organizational outcomes strategic choices and performance levels as reflections of the values of the members of the top management team, who interpret situations through the lens of their unique perspective.

upper-echelons theory