BADM 495 Final Questions
The author claims that managers don't understand business models due to:
A) A lack of good modeling tools B) No understanding of system dynamics C) Models have gone into corporate memory D) Lack of analysis training skills Answer: (C)
Which of the following is not a success factor for distinguishing high-functioning suites of innovation discovery tools from less effective ones?
A) Close strategic alignment with the company and relevant business unit B) Strong company backing in good times and bad C) A hands-off approach between individual business units and corporate R&D D) Effective organization design E) Effective leadership and the right mix of personnel Answer: (C) Success factors include: 1. Close strategic alignment with the company and relevant business unit 2. Strong company backing in good times and bad 3. True partnership between new tools and business units and corporate R&D 4. Effective organization design 5. Effective leadership and the right mix of personnel
Which of the following is not one of the elements of People's marketing strategy?
A) Convenient flight schedules B) Free beverages C) Low fares D) Positive atmosphere Answer: (B) People Express focused on having extremely low fairs and providing convenient flight schedules with "no freebies" (No free drinks or meals). People at PE were considered the value added to the commodity.
Which of these is NOT a perspective of the Balanced Scorecard Framework in this article?
A) Customer B) Internal business processes C) Organizational design D) Financial E) Learning and Growth Answer: (C) There are 4 perspectives: 1. Financial - The strategy for growth, profitability, and risk viewed from the perspective of the shareholder 2. Customer - The strategy for creating value and differentiation from the perspective of the customer. 3. Internal Business processes - The strategic priorities for various business processes, which create customer and shareholder satisfaction. 4. Learning and growth - The priorities to create a climate that supports organizational change, innovation, and growth.
Which of the following is not a test of inimitability?
A) Customer Satisfaction B) Physical Uniqueness C) Path Dependency D) Causal Ambiguity Answer: (A) Test of inimitability includes: Physical Uniqueness - (diamond mines) by definition are difficult to reproduce Path Dependency - (brand name) long term development of the resource Causal Ambiguity - (capabilities) when difficult to disentangle the key resource and how to recreate it Economic Deterrence - pre-empt competition by making sizable investment they will have to also build
Which is not part of the method for spotting and cultivating disruptive technologies?
A) Determining disruptive versus sustaining B) Define the strategic significance C) Locate the initial market D) Integrate the operation into existing processes Answer: (D) method for spotting and cultivating disruptive technologies include: 1. Determine if the technology is disruptive or sustaining. 2. Define the strategic significance of the disruptive technology. 3. Locate the initial market for the disruptive technology. 4. Place the responsibility for building a disruptive technology business in an independent organization. 5. Keep it independent.
Which of the following companies did not meet the mark in terms of the test of substitutability?
A) Express Cleaners B) People Express C) IKEA D) Disney Answer: (B) People Express built low cost no frills airline - but then was beaten by major airlines using "yield management" capability of computer reservation systems.
According to Principle 2, "______" is the overarching goal of the organization.
A) Financial Gain B) Development C) Synergy D) Employee Motivation Answer: (B)
Which of the following is a pro the "Favorable Points of Difference" type CVP?
A) Knowing a point of difference exists does not automatically convey value of difference to a customer B) Many points of difference creates a lack of distinction as to which point of difference delivers the greatest value C) Helps answer "Why should I buy from you instead of your competitor?" D) "Value Presumption"- assuming Answer: (C) everything else is a con
IBM used an approach dubbed ____________ when entering the PC market.
A) Lead the market B) Second to invent C) Trail the market D) First to invent Answer: (B) IBM waited until pc's had been more accepted and more helpful reviews came out to enter the market. That way they could perfect the pc and differentiate from their competitor.
Which of the following is not listed as one of the Five key success factors of the most innovative organizations?
A) Leverage intellectual property (IP) B) Strong management of IP portfolio C) A deep customer focus D) Well-defined and well-governed processes E) Full delegation to line workers Answer: (E) The five factors are: 1. Commitment of senior management 2. Leverage intellectual property (IP) 3. Strong management of IP portfolio 4. A deep customer focus 5. Well-defined and well-governed processes
The Threat of Substitutes is high when which of the following factors are present?
A) Low switching costs B) Improved products can now become substitutes C) Substitute offers attractive price -performance D) All of the above Answer: (D) All of the above
Which of the following aspects of the Growth Trap cause companies to fail with strategy?
A) Manager's lag technology B) Aggressive marketing C) Pressure to grow cause broadening of customer targets D) None of the above Answer: (C) Growth Trap: -Trade-offs appear to limit growth so are counter-intuitive to many managers -Pressure to grow causes broadening of customer targets - resulting in loss of distinctiveness -Instead - better meet needs and provide varieties where company is already distinctive
Which of the following was part of the planned human dimension at People?
A) Members profited substantially B) Lavish office design C) Specialization of tasks with little upward mobility D) Cheerful, friendly atmosphere E) Both A and D Answer: (E) Planned Human Dimensions Included: - PE showed positive results in sphere of personal growth - High levels of employee satisfaction showed up in first-year surveys done by Univ. of Michigan - Cheerful, friendly energetic atmosphere permeated the planes and passenger terminals - In a People flight manager position, the knowledge people gain is a phenomenal opportunity - PE start-up team members profited substantially
Select one way in which the Resonating Focus CVP is different from the Favorable Points of Difference CVP.
A) More is better - sell all value points to customer B) More is not better! Focus on delivering a few points that give greatest value. C) Avoid using "Points of Parity" D) None of the above Answer: (B) Differences include: 1. Use point(s) of parity strategically 2. More is not better
A successful Balanced Scorecard program starts with the recognition that it is not a metrics project; it's a/an "______" project.
A) Organizational B) Proposal C) Change D) Strategic Answer: (C) Change, the approach retained measures of financial performance, the lagging indicators, but supplemented them with measures on the drivers, the lead indicators, of future financial performance. Focused on "Change" to guide and manage educating the co. about the strategy.
Which of the following is not one of the four main paradigms for thinking about strategy?
A) Porter's Five Forces B) Resources Based View C) Dynamic Capabilities D) Customer Driven Focus E) Game Theory Answer: (D)
Which is not one of the 3 factors that define what an organization can and cannot do?
A) Process B) Values C) Resources D) Market position Answer (D) The 3 factors are: 1. Resources - Tangible: people, cash; Intangible: Brands, Design Skills 2. Processes - most important processes which are limiting are less visible decision support processes: investment, plans and budgets 3. Values - prioritization of effort and resources
IBM creates an environment of dynamic capabilities by requiring managers to have
A) Superior vision capability B) Strong ability to execute C) Project management skills D) Insight and execution skills Answer: (D)
Which of the following is not one of Porter's Five Forces?
A) Suppliers B) Share Holders C) Industry Competitors D) Buyers Answer: (B) The 5 forces are: 1. Suppliers 2. Industry Competitors 3. Substitutes 4. Potential Entrants 5. Buyers
Strategy often fails because of which of the following?
A) The steadiness of change B) Uncertainty and complexity of change and competition C) Senior management is busy distilling relevant information D) R&D and Project Management have the same skill set Answer: (B)
A mobile solutions company looking for new applications of its technology would use which of the following?
A) Tight-focus B) Wide-angle C) Lean model D) SIM process Answer: (B) Wide-Angle, Captures new thinking broadly across domains. For Mobile solutions, IT, and Internet-based product industries
Cultures and capabilities don't influence outcomes of individual and team success.
A) True B) False (B) False, Cultures and capabilities 100% influence the outcomes of employees and team success
When employees decide priorities by assumption, corporate culture has emerged.
A) True B) False Answer: (A) Faced with recurring tasks, routines are created and they embody assumptions for decision making - yields culture
A downside of People's growth was that the company faced chronic understaffing in senior management.
A) True B) False Answer: (A) False, Although there was chronic understaffing of employees, understaffing of senior management was never mentioned in the case study.
Every company studied that has tried to manage mainstream and disruptive businesses within a single organization has failed.
A) True B) False Answer: (A) True, Every company talked about in the Disruptive Technology "Catching the Wave" case study failed.
In Digital's discussions about resource allocation, Mini's won over PCs.
A) True B) False Answer: (A) True, Mini's always won over PCs in resource allocation decisions
Digital was lacking technical skill to build PC and that is a prime reason they failed in the PC market.
A) True B) False Answer: (B) False
Strategic Positioning means performing similar activities better than rivals. T/F.
A) True B) False Answer: (B) False, Strategic Positioning means performing different activities from rivals or performing them in different ways. -The answer would be true if it was for Operational Positioning
A flexible government policy is one of the seven true barriers to entry.
A) True B) False Answer: (B) False, The 7 barriers to entry include: 1. Supply-side economies of scale 2. Demand-side benefits of scale 3. Customer switching costs 4. Capital requirements 5. Incumbency advantages independent of size 6. Unequal access to distribution channels 7. Restrictive government policy
If you need new processes, you have to build a boundary from the existing organization.
A) True B) False Answer: (A) To develop new processes and values an organization must Spin out an independent organization. A large company cannot allocate the financial and human resources needed to capture a strong position in a small, emerging market
Accelerators enable a corporation to rapidly screen a large number of start-ups focused on a particular technology or region.
A) True B) False Answer: (A) True,
The Resourced Based View (RBV) sees companies as collections of physical and intangible assets and capabilities T/F.
A) True B) False Answer: (A) True, RBV: companies are collections of physical and intangible assets and capabilities - unique to each company - Assets and capabilities determine how well a company performs its functions - Physical, intangible and/or organizational capability - Implication: Superior performance based on a competitively distinct set of resources deployed in a well-conceived strategy
Industry Structure can be reshaped by expanding the profit pool.
A) True B) False Answer: (A) True, Expanding the profit pool increases the total pie available. - Identifies un-served markets - improves the supply chain to reduce inefficiencies - Agree upon industry quality standards and drive prices up
Managers see disruptive change coming, but they use improper structures and processes when they react.
A) True B) False Answer: (A) True, Managers usually see disruptive change coming, they just use the wrong processes when they react
An example of the "Power of Buyers" concept is when soft drink producers control packaging manufacturers' power by actually making packaging materials themselves.
A) True B) False Answer: (A) True, Power of Buyers is when buyers capture value when they force down prices and demand better quality/service. Usually occurs when there are few or many buyers, products are undifferentiated, and when there are few switching costs
Executives use the Balanced Scorecard to help communicate and educate the organization about the strategy.
A) True B) False Answer: (A) True, The main goal of the balanced scorecard is to guide and manage educating the company about the strategy.
When investing in and leveraging resources, management should pay little attention to the industry forces at play. T/F.
A) True B) False Answer: (B) False, Industry forces at play NEED to be understood. An example is Masco, where there were price sensitive buyers and powerful suppliers. They had bad results due to lack of analysis.
Porter points out that OE is necessary to compete and sufficient to win long term. T/F.
A) True B) False Answer: (B) False, OE is necessary to compete, BUT it is NOT sufficient to win long term due to the fact that many others will adopt the same operations and the firm eventually will be like all the others
People's bottom-line business indicators included cost containment, efficiency, and marketing payoff.
A) True B) False Answer: (B) False, PE indicators included: - Marketing payoff - Annual revenue rates were approaching $200 million - Cost containment - Total costs per available seat-mile were the lowest of any airline (5.2 cents comparted to a 9.4 industry average) - Productivity (not efficiency)
Compared to smaller companies, larger companies are better at quick adjustments, and respond faster to emerging markets.
A) True B) False Answer: (B) False, SMALL, hungry organizations are good at placing economical bets, rolling with the punches, and agilely changing product and market strategies in response to feedback from initial forays into market.
Disruptive technologies tend to be valued initially in new markets and applications.
A) True B) False Answer: (Not sure if this is right) (A) True, Disruptive technology: performs poorly on important attributes at first, better on unimportant attributes
Burr's office doubled as a conference room.
A) True B) False Answer: (A) Burr kept work space was low cost and strictly functional. Offices were located in the Main Newark terminal located in the old North Terminal building significantly cheaper to rent.
The Balanced Scorecard is only suitable for companies experiencing declining performance.
A) True B) False Answer: (B) False, the Balanced Scorecard is a great tool for ALL companies, regardless of performance
Disney's brand name does not meet the test of durability. T/F.
A) True B) False Answer: (B) False, Disney's brand name is extremely durable. While technological know-how is less durable, the brand name for Disney is well-known and extremely recognizable. Durability leads to sustainability, which Disney has successfully done
Incubators allow many companies to engage with early-stage start-ups through a short-term structured curriculum.
A) True B) False Answer: (B) False, They allow companies to engage with start-ups, but the process normally takes 3 years (not short-term)
The Balanced Scorecard provides a framework which enables the creation of a "performance mind-set."
A) True B) False Answer: (A) True
Which of the following is not an approach mentioned in the section "Demonstrate Customer Value in Advance."
A) Value Case Histories B) Value Calculators C) Use feedback and data to enhance CVP D) Use customer surveys to enhance CVP Answer: D) Customer surveys and fiel tests help to transform the value propostion
Which of the following is not one of the three distinct sources from which Porter states that strategic positions emerge
A) Variety-Based B) Income-Based C) Needs-Based D) Access-Based Answer: (B) Income-Based is not mentioned by Porter.
A "growing" business is the best indicator of a successful business model.
False, People Express is a great example. It was constantly growing, but definitely did not have a successful business model which was a sustainable for success.
Tata Ratan was responding to a shift in the basis of competition.
False, Tata Ratan was looking to create a safer alternative since none were available on the market.
Tata cars were designed to compete directly with suppliers of traditional, regular cars:
False, They were just a delivery service. Did not compete directly with car sales
Creating a new model for a new business implies that the current model is threatened and should be changed.
False, You can easily create a new model just to better describe your busness and focus without there being a direct threat
A con of the "All Benefits" type CVP is that it is quick and easy. T/F.
False, definitely a pro not a con
The best corporate venture units understand that greater than the risk of failure is the risk of not investing at all
True
A key idea in the section on Superior Business Performance is CVPs are a fundamental part of business strategy. T/F.
True, CVPs, properly constructed and delivered contribute significantly to business strategy and performance. SONOCO - DVPs distinctive, measureable, sustainable. Value-proposition training program. Real-world contest CVPs are a fundamental part of business strategy
Effective strategy comes from alignment of all components. T/F.
True, Effective Strategy comes from: Point 1: Leadership requires strategic insight plus execution Point 2: Start with performance or opportunity gap and then measure against business outcome metrics Point 3: Effective strategy comes from alignment of all components
One reasons strategy is so important as it answers the question: How can we obtain and achieve a competitive advantage. T/F.
True, Strategy is important because Strategy is the answer to "how can we achieve and sustain competitive advantage?" Strategy refers to the plans and actions firms take to achieve their objectives. Making quality decisions and executing well on those decisions.
The article claims there is little value in articulating the business model, watching trends is what's important.
True, Watching for trends and change in the future is key