B BUS 470B: Strategic Management and Project Management
Which of the following statements about organizational knowledge is correct?
- Knowledge is an intangible resource - The importance of knowledge is increasing - The value of knowledge as a proportion of shareholder value is increasing.
Customer defection rates are
- an indication of a company's ability to satisfy is customers - important to consider because of their potential impact on advertising and marketing costs - an important consideration because of their effect on sales volumes - a reflection of customer loyalty
Value consists of
A product's performance characteristics and by its attributes for which customers are willing to pay.
Criticism of 3M's reduced spending on research and development represent concerns over what?
A reduction in the firms capability for innovation.
An effective business model
A) involves how a company selects its customers. B) creates value for its customers. - achieves and sustains a high level of profitability. - produces goods and services
According to Porter, what is usually the most powerful of the five competitive forces?
Bargaining power of consumers
What is not one of Michael Porter's five competitive forces?
Bargaining power of unions
A firm's strengths that cannot be easily matched or imitated by competitors are called
Distinctive Competencies
A business model is not directly connected to how a firm makes money.
False
A high threat of new entrants keeps pricing pressures on existing firms, keeping consumers happy and making the industry attractive and profitable.
False
A vision statement answers the question, "What is our business?," whereas a mission statement answers, "What do we want to become?"
False
A vision statement is, in essence, a company's game plan.
False
Although a useful step in the strategic management process, value chain analysis can rarely help a firm monitor whether its prices and costs are competitive.
False
Analysis of the firm's internal organization examines the firm's portfolio of resources but excludes the bundles of heterogeneous resources and capabilities.
False
Bargaining power of consumers is usually the most powerful of Porter's five competitive forces.
False
Capabilities can be developed quickly in response to changes in the new competitive landscape.
False
Compared to tangible resources, intangible resources are an inferior source of core competencies.
False
Eavesdropping is an ethical way to obtain information about competitors' actions.
False
Every core competence is a capability and every capability is a core competence.
False
External environmental analysis should be conducted annually
False
Firms that compete within a strategic group rarely use similar competitive strategies
False
Generally, the stronger the competitive forces, the higher the profit potential of an industry.
False
In the global economy, traditional factors such as labor costs, access to financial resources and raw materials, and protected or regulated markets are no longer sources of competitive advantage.
False
Increasing absorptive capacity, or the ability of a company to identify, value, assimilate, and use new knowledge is an essential function of Product development Teams
False
Monitoring involves the development of a forecast of what might happen at a future point in time.
False
Once a firm acquires a competitive advantage, they are usually able to sustain the competitive advantage for an extended period of time.
False
Opportunities are a firm's distinctive competencies that cannot be easily matched or imitated by competitors.
False
Organizational culture refers to the core values shared by the firm's top-level managers but not necessarily accepted by lower-level employees who are often transitory and not committed to the organization.
False
Organizational stakeholders are the firm's internal resources, capabilities, and core competencies that are used to accomplish what may at first appear to be unattainable goals in the competitive environment.
False
Organizational vision and mission serve as emotional tools for the firm, and, as such, have little impact on firm performance.
False
Political, governmental, and legal factors are considered key threats for most small and large organizations.
False
The aim of an external audit is to develop an exhaustive list of every possible factor that could influence the business.
False
The controlling function of management is synonymous to strategy formulation.
False
The essential core of strategy is doing the same thing as your rivals but being more effective at it.
False
The goal of strategic management is to develop a competitive advantage that is permanently sustainable.
False
The mission statement should be short—preferably one sentence.
False
The underlying industry structure has little effect on individual firms' competitive conduct.
False
There are three generic business level strategies.
False
To pursue a cost leadership strategy, strategic managers need to incorporate all the latest technology into their products.
False
Top-down strategic planning works best in more uncertain situations because the firm hand of senior leadership is best at seeing the future.
False
Under the value chain concept, only primary activities add incremental value
False
Value is measured by the variable and fixed costs associated with the production and marketing of a particular product compared with the revenue and profits the product generates.
False
While Information Systems (IS) have greatly improved externally focused decision making, they have had little impact on lowering costs
False
Without strict governance mechanisms, the majority of executives will act in their own self-interest rather than acting as positive stewards of firm resources.
False
The primary role of Human resources in achieving superior innovation is
Hire talented scientists and engineers
What step in the strategic development process involves mobilizing employees and managers to put strategies into action?
Implementing strategy
The primary role of Material Management in achieving superior innovation is
No primary responsibility
Which of the following cognitive biases refers to the fact that decision makers who have strong prior beliefs about the relationship between two variables tend to make decisions on the basis of these beliefs, even when presented with evidence that their beliefs are wrong?
Prior hypothesis bias
The process that describes the method by which managers conceive of and implement a strategy that can lead to a sustainable competitive advantage is called what?
Strategic management
Competitive advantage typically leads to
Superior Profitability
The quality of Hyundai vehicles has increased dramatically. Its cars now rank at the top of the list in vehicle quality, exceeding even Toyota. To management's surprise, this has not led to an increase in sales. From the standpoint of capabilities, what can we conclude about Hyundai's quality?
The increased quality fails the "value" test.
Which of the following is not a characteristic of well-constructed goals?
They are the result of a group decision process.
The primary role of Infrastructure in achieving superior customer responsiveness is
Through leadership by example, build a wide commitment responsiveness to customers
A competitive advantage can be created when several resources are bundled together in a unique fashion.
True
A global mind-set is free of the assumptions of a single country, culture, or context.
True
An opportunity analysis is an appraisal of the costs, benefits and risks associated with marketing decisions.
True
Because the health of a nation's economy affects the performance of individual firms and industries, companies study the economic environment to identify changes, trends, and their strategic implications.
True
Creating customer value is the source of the firm's potential to earn above-average returns
True
Given enough time, any firm's competitive advantage can be imitated by its competitors.
True
High exit barriers are factors that cause a company to remain in an industry even though the profitability of doing may be questionable.
True
In both monopolistically competitive industries and oligopolistic industries, the ability to differentiate a product provides a firm with pricing power
True
In the implementation stage of scenario planning, managers will activate the dominant strategic plan.
True
In the long run, if an organization does not change it will fail.
True
Internal R&D and contract R&D are the two basic forms of R&D in organizations.
True
One of Matsushita's strengths is the ability to continue to improve employee productivity
True
Resources and capabilities can be a source of rigidity for the firm.
True
Shareholders are satisfied when return on investment has been maximized.
True
Strategic management is an attempt to organize qualitative and quantitative information in a way that allows effective decisions to be made under conditions of uncertainty.
True
The capacity to manage human intellect—and to convert it into useful products and services— is fast becoming the critical executive skill of the age.
True
The final result of successful strategic competitiveness is above-average returns.
True
The importance that a society places on universal access to healthcare would be considered part of the sociocultural aspect of the external environment.
True
The main competitive factor facing companies offering traditional telephone service is the existence of substitute products and services.
True
To perform an external audit, a company first must gather competitive intelligence and information about social, cultural, demographic, environmental, economic, political, legal, governmental and technological trends.
True
Value is created when the firm exploits its core competencies or competitive advantages to meet or exceed the demanding standards of global competition.
True
By exploiting their core competencies to meet or exceed the standards of global competition, firms create ______ for customers.
Value
The process whereby a firm determines the costs associated with organizational activities from purchasing raw materials to manufacturing products to marketing those products is called
Value Chain Analysis
A decision that results in failure
allows for learning.
Marina's new paint formulation builds on other product innovations to create paint with fewer toxic fumes. Marina's new paint is
an incremental innovation
An important first step in the process of formulating a company's mission is to
answer the question, "What is our business?"
Tangible resources include
assets that can be seen and quantified.
To provide a sustainable competitive advantage, a capability must satisfy all of the following criteria EXCEPT
be technologically innovative.
The focused differentiation strategy differs from the differentiation strategy in that
c. focused differentiators target a narrower customer market.
Internal analysis enables a firm to determine what the firm
can do
Sam Walton wanted Wal-Mart to keep costs low. Therefore, as an example to others, he drove his own car and furnished his office with plain, steel desks. In this case, Mr. Walton was displaying his
commitment.
The proper matching of what a firm can do with what it might do allows the firm to
develop its vision, pursue its mission, and select and implement its strategies.
The strategies that a company's managers pursue
have a major impact on the company's performance relative to its competitors
A firm's mission
is a statement of a firm's business in which it intends to compete and the customers it intends to serve.
To be effective, when should environmental analysis be conducted?
on an on-going basis
A company's infrastructure includes the company's
organization structure, culture, and style of leadership
Flexible manufacturing technologies allow companies to
produce small batches of customized products at a relatively low cost.
Above-average returns are
profits in excess of what an investor expects to earn from other investments with a similar level of risk.
Which of the following identified in an analysis of the general environment is an opportunity for an entrepreneur who wishes to open a business doing "Fitness for Life" physical conditioning services (strength, balance, and flexibility training) in a city of 100,000 people?
the average age of the population in his community is high
The five forces model suggests that an industry's profitability is a function of all the following factors EXCEPT
the economic environment.
The strategic management process is
the full set of commitments, decisions, and actions required for the firm to achieve above-average returns and strategic competitiveness.
Which of the following statements is most consistent under the I/O view? Performance of the firm is most directly attributable to
the profitability of the industry the firm competes in.
Competitive advantage typically comes from
the unique bundling of several resources.