WPC 480 Exam 1

A wearable technology company has prices one of its wristwatches at $210. Most of its competitors sell similar watches at $180. Selling anything less than $150 would result in a loss for the company. However, the absolute maximum a customer is willing to pay for it is $170. In this scenario, what is the reservation price of the wristwatch?

$170

Which of the following is an example of competitive parity?

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

When performing internal analysis of firms, how would you answer the question, "why do companies exist?"

Companies exist because they create value for customers in ways that customers are unable to replicate on their own

To support the rise of emergent strategies, an organization should...

Empower lower-level employees to take up autonomous actions

What does it mean for a firm to have an 80 percent learning curve?

Everytime the cumulative output is doubled, the cost per unit will decline by 20 percent

Whole Foods focuses on a small market segment, affluent consumers who want to buy high-end, organic groceries. What is the appropriate name for Whole Foods's scope of competition?

Focused

How does causal ambiguity act as an isolating mechanism for organizations?

It makes it difficult for the competitors to understand why a company has been so successful

Which of the following is a primary feature of the five forces model?

It views the competition broadly to include forces such as buyers, suppliers, and the threat of substitutes

Hot Wok Cuisine is a premium Asian restaurant chain that differentiates itself from a large number of competitors by providing exclusively organic Chinese cuisine. It has some pricing power because it provides differentiated products and therefore, has some entry barriers in place. In this scenario, Hot Wok Cuisine is most likely operating in a(n)

Monopolistically competitive industry

Which of the following scenarios best illustrate bundling?

Warephase Inc. sells seed packages, in which a person can buy a package of three types of seeds at a discounted price compared to buying the seeds individually

In the final step of the stakeholder impact analysis, a firm...

decides a course of action to address the stakeholder's concerns

When the strong dictatorial rule in Arlington unexpectedly collapsed due to the shocking death of the royal family in an explosion, the nation's economy experienced drastic changes. The laws became more restrictive, the country lost many locally produced resources and products, and the distribution of wealth became inequitable. The unexpected event that led to these changes can best be described as a(n) ________ event.

Black swan

Tindel Inc. competes on cost with Nirvana Sites in the web design industry. Both firms operate on a 90 percent learning curve, and neither firm is capable of increasing its cumulative output any further. How might Tindel Inc. achieve a cost-leadership position while maintaining customer satisfaction?

By incorporating new programming techniques to take advantage of experience-curve effects

Which of the following best describes a Level 5 manager in the Level-5 leadership pyramid?

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

You are the CEO of a tech company and have recently undertaken a review of your company's strategy. In comparing your stock market valuation to that of your closest competitor, you note that your firm is currently valued at $50 billion, while your competitor is valued at $40 billion. How should you proceed?

Compare the current valuations with past valuations to determine a trend

While implementing strategic group mapping for the U.S. domestic airline industry, two strategic groups become apparent: low-cost, point-to-point airlines (Virgin Atlantic, Alaska Airlines, JetBlue, and Southwest Airlines) versus differentiated airlines using a hub-and-spoke system (American, Delta, and United). Which of the following statements is true about these two strategic groups?

Competitive rivalry between Virgin Atlantic and JetBlue is likely to be higher than that between American and Southwest Airlines

The minimum wage in the country of Hanns is $8 an hour. Delish, a restaurant in Hanns capital city, pays its servers $8 per hour. However, the management of the restaurant feels that this amount is excessive for workers whose only job is to clear tables. By continuing to adhere to the rules set by the government on Hanns, which of the following responsibilities is Hanns following?

Legal responsibilities

The owners of Always Baked bakery want to open a second retail outlet. Which if the following scenarios is most likely to yield a competitive advantage?

Open a shop on an inexpensive piece of land near a new mixed-use residential and business district currently under construction

Which of the following statements should ideally reflect a firm's strategy for competitive advantage?

Our aim is to create superior customer value while controlling costs

Breeze Car Rental follows a cost-leadership strategy. Which of the following firms will most likely be its direct competitor?

Quicker Rental Cars which follows a low-cost strategy

Chad is the founder of a firm producing self-driving vehicles. Because the industry is so new and chaotic, Chad favors a top-down strategic planning approach in which he exerts strong control over all aspects of the business, from product development and design to manufacturing and marketing. What is wrong with this scenario?

The self-driving vehicle industry is changing too much for the top-down approach to be effective

Connell Inc. has been successful at differentiating itself from competitors by claiming a premium price for its digital cameras based on superior image quality and advanced technology. In this scenario, which of the following is the key value driver?

Product features

One of the reasons that big box retailers like Home Depot are able to achieve economies of scale is that...

They are able to take advantage of physical properties and maximize their scale efficiencies by stocking more merchandise and handling inventory more efficiently

If you examine various barriers to entry facing firms that might wish to enter the airline industry, this would be most helpful in assessing which of the five forces in the industry?

Threat of new entrants

There are several major limitations of employing the balanced scorecard framework. Which of the following below is NOT one of those limitations?

The type of marketing and HR functions used to employ the framework (the effectiveness is contingent upon the skills of managers using it, the metrics chosen, and asking four key questions)

Which of the following practices of a firm satisfies its ethical responsibilities?

Selling vaccines at a subsidized price in a less developed country even though this results in reduced shareholder returns

Bioplex requires its members to pay a quarterly or an annual fee to use its services. Irrespective of whether they frequently use the services during the payment period or not, members have to pay in advance. Which of the following business models does this best illustrate?

Subscription-based

Frozen Gold is a fast-growing chain of ice cream shops. It has acquired an edge over its competitors through its ability to provide a wide array of unique flavors and a hip atmosphere in stores. This advantage of Frozen Gold best exemplifies a

Core competency

Tim's ToothCream has been the leader of dental care products for about 40 years. However, this company relied too long on its competency of reducing cavities without refining or upgrading other aspects of its product. As a result, other personal hygiene companies that began to offer toothpastes with natural whitening agents gained a competitive advantage over Tim's ToothCream. This case is an example of

Core rigidity

The CEO of All Star Corp. has decided to enter the markets of emerging nations like China and Brazil. This means that the books, magazines, and websites publishes under the Chyron Media banner would be made available in these nations. Which of the following strategies does this scenario best illustrate?

Corporate strategy