Badm 449 Exam 1

Does experience (history of production) matter more for a firm's learning curve or economies of scale?

Economies of Scale

A Blue Ocean strategy always creates sustainable competitive advantage because it combines a differentiation strategy with a cost leadership strategy. (True or False)

False

As a rule of thumb, the stronger the five forces (Threat of entry, threat of substitutes, power of suppliers, power of buyers, rivalry), the higher the industry's profit potential, which causes the industry to become less attractive for competitors. (True or False)

False

The essence of strategy is doing the same thing as your rivals but being more effective at it. (True or False)

False

Vertical differentiation refers to the case where all consumers prefer a high-quality product over a low-quality product if both products have the same price. (True or False)

False

What are examples of isolating mechanisms according to the Resource Based View? (Mark all that apply)

• Barriers to imitation • Helps sustain a competitive advantage - Better expectations of future resource value - Path dependence: past decisions limit current options - Causal ambiguity: cause and effect are vague - Social complexity: social and business systems interact - Intellectual property (IP) protection

What factors lead to high (price) rivalry? (Mark all that apply)

• Competitive industry structure (number and size of competitors) • Industry growth • Strategic commitments • Exit barriers

What are typical examples of barriers to entry? (Mark all that apply)

• Economies of scale • Network effects • Customer switching costs • Capital requirements • Advantages independent of size (brand loyalty, patents, experience) • Government policy • Credible threat of retaliation

What factors lead to high bargaining power for suppliers? (Mark all that apply)

• There are only a few buyers • Each buyer purchases large quantities relative to the size of a single seller • Buyers face low or no switching costs • The industry's products are standardized (undifferentiated)

Which of the following is NOT considered an important macro-environmental influence on businesses (that is, a potential influence beyond that of the industry alone)?

*Look at "Lecture 3" economic factors(slide 7)

The threat of rivalry in the lodging industry is high because ________. (Mark all that apply)

*slide 31-32 in lecture 3

Core competencies are built through the interplay of several firm attributes. These attributes include a firm's:

- Core Copmpetencies - Resources - Capabilities

What are examples of generic business strategies? (Mark all that apply)

Cost Leadership & Differentiation

The Five Forces framework seeks to explain differences in potential profitability across ________.

Different Industries

Recent changes in the economy have increased labor turnover (the number of your workers who quit) goes up. Does this matter more if your strategic advantage is based on learning curves or economies of scale?

Learning Curves

What is the fundamental tradeoff of differentiation?

Moving away from the mass of demand while lowering the extent of price competition from your rival

According to Porter's Five Forces approach, the overall goal of applying the Five Forces analysis to an industry is to make a judgment about its ________.

Profit Potential

What is an important assumption of the Resource Based View?

Resources fall into two categories: Tangible and Intangible

In recent years, a growing number of U.S. consumers have become more health-conscious about what they eat. According to the PESTEL Framework this trend could best be classified as a ________ trend.

Sociocultural

Tesla is addressing environmental concerns regarding the carbon emissions of gasoline-powered cars by building zero-emission battery-powered vehicles. This best represents which of the following PESTEL categories?

Technological Factors

The major problem of differentiation is that it often lowers the total value created (economic surplus) in the market. (True or False)

True