WPC 480 Midterm

Which of the following is an advantage of a triple-bottom-line approach?

The approach takes an integrative and holistic view in assessing a company's performance

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

How does a firm capture its producer surplus for a good or service?

As profit per unit sold

A firm always has a competitive disadvantage when its return on invested capital is A) about the same as its closest competitor B) below the industry average C) 2 percent or lower in a declining industry D) declining steadily over two or more years

Below the industry average

Which of the following below is NOT categorized as a primary activity on Porter's value chain?

Procurement (Operations, after sale service, and marketing and sales ARE)

In an economic context, strategy for producers is primarily about

Capturing the economic value created as much as possible

Jill is exploring multiple suppliers in order to find the best price. However, instead of calling all eight potential suppliers, she only reaches out to the first three and bases her selection on those instead of contacting all suppliers. Jill's action best describes the concept of

Cognitive limitations

Which of the following provides an example of a firm in a red ocean?

Cool apparel offered clothing at a low price but failed to differentiate its product as being exclusive

Progress Apparel's core value statement reads we will ensure our clothing is made with the highest respect toward human rights and environmental protection. Which of the following actions exemplifies how Progress's core values drive its strategic decision making?

Demanding that textile suppliers pay livable wages and maintain safe production facilities

How is differentiation parity different from cost parity?

Differentiation parity deals with value not cost

When Total Semiconductors was operating at the minimum efficient scale of 10,000-12,000 units per month, the firm's cost per unit was $45. However, when the output level was increased beyond 12,000 units, the cost per unit increased to $47. This increase was attributed to the wear-and-tear of the machinery, and complexities of managing and coordinating. What is this phenomenon known as?

Diseconomies of scale

Food Tiger Inc. is a large chain of hypermarkets. It has cost benefits due to its extensive operation. The company's marketing and sales, logistics, administrative, and other such related costs get divided between a large number of product units stocked in its stores. This makes it difficult for smaller retail stores and supermarkets to compete against Food Tiger's low prices. Thus, Food Tiger has a competitive advantage due to its

Economies of scale

In the aircraft manufacturing industry, at least for large commercial jets, Boeing and Airbus are the only competitors. There is not a significant threat of entry because: A. entering the aircraft manufacturing industry requires huge capital investments. B. there is expected to be a huge return on investment within this industry. C. there is no credible threat of retaliation from the incumbents. D. entering the aircraft manufacturing industry means violating government policies.

Entering the aircraft manufacturing industry requires huge capital investments

Trader Joe's differentiates itself from competitors by offering top-quality foods obtained through sustainable agriculture. This business strategy implies that Trader Joe's focuses on

Increasing the perceived value created for customers, which allows it to charge a premium price

Suger & Sweet Sodas has seen its market share erode in recent years, as consumers increasingly turn toward healthier beverage choices such as unsweetened sparkling water. Hoping to rekindle interest in sugar sodas, Suger and Sweet decides to produce a limited run of "throwback" cans using labeling first introduced in the 1980's. What is wrong with this strategy?

It fails to face the competitive challenge

Suppose that several senior managers recently left Target Corporation and went to work at rival Walmart. What part of the "stocks and flows" of resources does this represent for Target Corporation?

Leakage (occurs when key employees leave)

Which of the following is a drawback of Porter's Five Forces model?

Managers cannot determine the changing speed of an industry or the rate of innovation

As the strategic manager of ShRPer Scissors, you are tasked with producing a strategy for introducing a new line of premium scissors. Your competitor produces a line of similar scissors at a cost of $1 and sells them for $12. Because your company has inferior production capabilities, your scissors will cost $3 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? A) Reduce the quality of materials used in ShRPer scissors to bring unit costs down to $1, then sell the scissors for $12. B) Continue to produce ShRPer scissors for $3 but set the price at $10. C) Offer a buy-one-get-one-free sale on ShRPer scissors. D) Market ShRPer scissors as a higher-quality alternative and sell them for $15.

Market ShRPer scissors as a higher quality alternative and sell them for $15

In nearly ever case, which of the Five Forces is the most important in determining the relative power structure in an industry?

No single force is dominant in most every case

Chips & Motherboards Inc., a leading hard drive manufacturer, recently filed for bankruptcy. While most of Chips & Motherboards Inc.'s competitors were shifting away from physical data storage devices toward online cloud storage services, Chips & Motherboards Inc. invested most of its retained earnings in the effort to improve its hard drives. Once the hard-drive market drastically declined, Chips & Motherboards Inc. was unable to capitalize on the new technology. Which of the following does this scenario best illustrate?

Path dependence

We Build & Build's' core competency is building multi-family housing in urban areas. This competency is based primarily on the decisions made by the company's top management over several years to focus on building in densely populated cities. Management used the process of A) path dependence. B) dependence complexity. C) causal dependence. D) path immobility.

Path dependence (process in which the options that one faces in a current situation are affected by decisions made in the past)

Lil Anthony's and Amelia's are two restaurants serving Italian cuisine. While Lil Anthony's focuses on providing quick, affordable pasta dishes for the lunch crowd, Amelia's focuses on serving home-style dishes in an upscale, romantic setting. Both companies have been able to gain a competitive advantage. This is most likely because the companies have A) benefitted from economies of scale. B) entered into a cartel arrangement. C) pursued distinct strategic positions. D) engaged in direct imitation and substitution.

Pursued distinct strategic positions

Southwest Airlines (SWA) and Alaska Airlines both compete as point-to-point airlines, but they draw upon different resource bundles. This example best illustrates which of the following assumptions regarding the resource-based view?

Resource heterogeneity

Dora's Supplies manufactures medical devices. The firm's profitability depends on several variables that are subject to occasional change, including the cost of parts and labor, changes in medical practices, and the price of oil used in both manufacturing and shipping. To account for the potential impact of changes to any of these variables, Dora's Supplies managers should implement a(n) ________ approach. A) top-down strategic planning B) scenario planning C) upper-echelon D) strategic business units

Scenario planning

Amber is the manager of gardening supplies wholesaler DigIt Inc. The company's vision is to become the leading supplier of gardening materials in the northeast. In assessing the firm's current state, Amber has determined that the firm could differentiate itself from competitors with an easy-to-use online ordering system and a two-day delivery guarantee. To accomplish this, Amber has determined that DigIt must spend the next two quarters honing its capabilities for sourcing materials quickly and improving its web development competencies. According to the balanced-scorecard approach, what is wrong with Amber's thinking?

She has not addressed the question of how Digit will create value

Bright 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 Bright Lighting ample competition. In response, Bright 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, Bright Lighting consistently outperformed its competitors for ten years. In this scenario, Bright lighting maintained a _____through its innovative strategies

Sustainable competitive advantage

We Ensure Inc., an insurance firm, replaced its existing project management software with new software from another supplier. Since the new software has different features and abilities, We Ensure has had to spend $10,000 on training its employees to use it. In this scenario, $10,000 represents We Ensure's

Switching costs

Which of the following methods of developing a strategy best illustrates scenario planning

The managers at north clothing Inc. formulated a strategy that can handle small to medium to large increases in the prices of cotton in the future

A firm's strategic position is likely to be strong when

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

During the process of formulating an effective business model, a firm's manager should first

transform their strategy of how to compete in a blueprint of actions and initiatives