WPC480 Chapter Quizzes 7-12

Siobhan, the chief financial officer at an office furniture manufacturer in Canada, wants to build new plants in Canada rather than overseas. Which of these points should she make as she argues her case to the board of directors?

"It will be much more difficult to protect our intellectual property if we build factories overseas."

How is an equity alliance different from a joint venture?

An equity alliance involves taking ownership in a partner; a joint venture involves two or more entities owning a firm.

Which of the following summarizes the benefit of the strategic alliance between HP and DreamWorks?

Both HP and DreamWorks were able to enter a new market that they would not have been able to pursue alone.

Dana wishes to strengthen her firm's marketing department by partnering with a large marketing firm that can complement her existing value chain. However, she fears potential legal repercussions including potential lawsuits filed by U.S. federal agencies such as the Federal Trade Commission (FTC). Which of the following strategic options should Dana pursue?

Dana should consider forming a strategic alliance with the marketing firm.

Jeremy is a strategist who wants to decide on the appropriate strategy to help his firm "go global." Which of the following should he consider while choosing his strategy?

He must be aware of the fact that despite globalization and the emergence of the internet, firm geographic location has actually maintained its importance.

One of Black Mesa's core values is to provide unbeatable customer service, a commitment introduced to the company by its founder more than 10 years ago. This value is expressed in the company's "Always You" campaign, which promises a no-questions-asked returns policy and an offer to stitch the customer's initials onto any item for free using a patented sewing technique, two features that are not offered by any of Black Mesa's competitors. Although the campaign has resulted in a 10 percent decline in profits, Black Mesa has decided to continue to pursue its founder's vision to reward customers and maintain employees' sense of purpose. Why does Black Mesa's culture, exemplified by the "Always You" campaign, fail to support a competitive advantage?

It does not increase economic value creation for the firm.

How has Kraft Foods benefited from its hostile takeover of Cadbury PLC?

It has access to convenience stores and a new distribution channel.

Which of the following scenarios would be characteristic of an entrepreneur?

John implemented a new and more efficient way to produce pottery.

Li runs a firm that has diversified into different product lines and geographies. She should probably use a(n) _______ organizational structure.

M-form

Dinotopia is a country of English-speaking people and has a very profitable economy. Which of the following countries is most likely to be the closest to Dinotopia in terms of cultural distance?

Maldonia, where people speak English and have a low standard of living

Which of the following below is not considered an advantage of utilizing a platform business model?

Platforms push firms to constantly engage in radical innovation in order to produce goods and services for the market.

Dev is a strategist for the firm Stark Industries, which produces high-quality HD movie cameras. This company needs a specific material for a new camera they are developing, which is manufactured in large quantities by a competitor called LENS Inc. However, this material is difficult to trade. Because of this, which of the following is most likely the best strategy for Dev to suggest?

Stark Industries should acquire LENS.

Which of the following is true of the codes of conduct of an organization?

They detail how the organization expects an employee to behave and to represent the company in business dealings.

Which of the following statements is true of joint ventures?

They enable the exchange of both tacit and explicit knowledge.

Why is it easier for new entrants to get involved in radical innovations when compared to incumbent firms?

Unlike incumbent firms, new entrants do not have formal organizational structures and processes.

Paul is a manager at Macmillan Toys Inc. and is friends with the company's CEO. This privilege gives Paul the information that Macmillan Toys is in the midst of talks to take over a leading rival. Paul buys stocks of Macmillan Toys with the expectation that its stocks will appreciate. But the deal falls through, and the stocks of Macmillan Toys depreciate in the following months. Are Paul's actions unethical? Why or why not?

Yes. It is unethical to trade stocks based on insider information, irrespective of the final outcome.

Susan works for a firm that has high degrees of formalization in their organizational structure. She understands that one of the main drawbacks of working in a firm with such high levels of formalization can often result in which of the following?

a slower decision-making process

Jonathan is interested in building the centerpiece of his firm's corporate governance, and so hires a ________ that is made up of individuals from both inside and outside the firm.

board of directors

XYZ Inc. is a publicly traded company and a highly diversified firm. However, XYZ's most recent stock price is valued less than the sum of all its individual business units. We would conclude that XYZ is currently experiencing a _____________

diversification discount.

Konmatfix Inc., a large consumer electronics company, has divided each product in its portfolio into a separate strategic business unit (SBU). The desktop SBU has been experiencing drastic decline in its cash flow, and its market share has also reduced to an insignificant 10 percent. This has been attributed to the low growth in the desktop market after the arrival of tablet computers and laptops. In the context of the Boston Consulting Group (BCG) growth-share matrix, the desktop SBU will be categorized under ________

dogs

Tom is the inventor of a personal fitness tracking device, and he is in the process of hiring employees after receiving investment funding. When considering how to structure his company, he should

first establish a strategy and let that be him guide.

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

Adverse selection in a public stock company occurs when __________

information asymmetry increases the likelihood of selecting inferior alternatives.

Genco Pura Olive Oil Company has established themselves as a strong differentiator in their respective SBUs but now wishes to explore international strategies. They are prepared to fully customize their product offerings to meet the needs of the foreign country that they are entering; having conducted many surveys on local preferences, tastes, and requirements, the Genco Pura Olive Oil Company will more than likely pursue a ________ strategy.

multidomestic

Amy is the CEO of a line of accessories and cosmetics, Hooli Inc., which has retail stores and production units in five countries. In this scenario, Hooli Inc. is most likely a _________

multinational enterprise.

Ethics is:

not synonymous with law.

VineRipe Tomato Inc. makes organic ketchup. To promote its products, this firm decided to make bottles in the shape of tomatoes. To accomplish this, VineRipe worked with its bottle manufacture to create a set of unique molds for its bottles. Which of the following specialized assets does this example demonstrate?

physical-asset specificity

Facebook has become one of the largest media companies in the world, valued at nearly 50 billion in 2019, but hasn't produced a single piece of content. Facebook is an example of a ____________

platform business.

Which of the following is an unintended side effect of a high degree of specialization in an organization?

reduced employee satisfaction due to repetition of tasks

Mary has been named CEO of an office furniture manufacturing company. As CEO, she is tasked with setting the firm's corporate strategy. Which of the following decisions is Mary most likely to make?

what range of products the firm should offer