business policy midtern

Which of the following describes how Amazon disrupted the traditional wholesale model for book publishers?

Amazon sold e-books for its e-reader device at a loss to promote sales of the e-reader.

What tactic did Amazon use when entering the book selling space and introducing the Kindle?

Amazon used disruption.

Which of the following is true about a sustainable strategy for a business?

It is a strategy that can be pursued over time without harmful effects on people or the environment.

strategic committments tend to be

difficult to reverse and costly

level 3 managers exhibit

doing things right

True or false: When companies commit to sustainable strategies, they do so purely out of a spirit of charity.

false

level 3 members should be able to create long lasting greatness through resolve and humbleness t/f

false

An inspiring vision helps employees ______.

find meaning in their work

Premium services that cost money, with complementary basic services, is a description of which type of business model?

freemium

everybody can use the basic version of Dropbox for free, but needs to pay for premium services. Dropbox operates on a _______ business model.

freemium

Answering the balanced scorecard question of "how do we create value?" challenges managers to develop strategic objectives that ensure which of the following?

future innovation future organizational learning future competitiveness

business strategies are developed by

general managers in SBUs

A company's stock price increases if the company

grows faster than expected

shortcomings of the top down approach of strategic planning are that

plans for the future can be wrong, and there is uncertainty about the future

When one wants to further explore the difference in return on revenue (ROR) for two competitors, one can look at which of the following ratios? (Check the three that apply.)

COGS/revenue R&D expense/revenue SG&A expense/revenue

To determine how efficiently a company can produce a good, managers look to the ______.

COGS/revenue ratio

To formulate an appropriate business-level strategy, managers must answer the "who-what-why-and-how" questions of competition. Which of the following would be the appropriate questions to answer?

How will we satisfy our customers' needs? Who are the customer segments will we serve? What customer needs will we satisfy?

Which statement best describes groupthink?

Individuals automatically agree with a leader without critically evaluating or challenging the leader's views and assumptions.

Which statement best describes the cognitive bias of representativeness?

Individuals reach conclusions based on a small sample size or otherwise limited data, thereby violating the law of large numbers.

Which statement best describes the cognitive bias known as reason by analogy?

Individuals use simple examples to explain complex problems, even though the ideas in question may be very different from each other.

What is one potentially negative outcome that firms face when they deliver higher than expected growth?

Investors will expect a similarly high level of growth in the future.

A black swan event has which of the following characteristics?

It has a major impact on society.

In the scenario-planning approach, what happens during the analysis stage of the AFI framework?

Managers work to identify potential future scenarios.

To determine how well money devoted to sales support is being spent, managers look at the marketing intensity ratio, which is also known as ______.

SG&A/revenue

Which of the following are considered disadvantages of the shareholder value creation approach?

Stock prices can be highly volatile. Stock prices are influenced by the psychological mood of investors. Overall macroeconomic factors have a direct bearing on stock prices

What is the premise of Henry Mintzberg's position regarding strategic planning?

Strategy can be planned or emerge from the bottom-up.

a powerful strategic committment assures that the steps are taken to

achieve the message

how to compete, such as differation, are referred to as a

business strategy

The acronym SG&A stands for sales, general, and ______________ expenses.

administration

Opportunity costs refer to the value of what could have been gained had a person pursued

an alternative use of available resources

Under a wholesale model, RETAILERS (not the wholesalers) sell goods for ______.

any price they want

In order to ensure that a firm is implementing the triple-bottom-line approach successfully, managers must

audit the company's results in fulfilling its social and ecological obligations

Companies are required to provide _________ to shareholders, which are used in determining a firm's competitive advantage.

benchmarks

In their annual filing with the Securities and Exchange Commission, public companies in the United States must report which of the following?

benchmarks the total return to shareholders

Which of the following is a term used to describe a highly unlikely event that has a significant impact on society?

black swan event

A firm uses the ______ business model when it sells a set of products that have different levels of demand for a price less than their total combined prices.

bundling

which strategy addresses the question of how to compete

business

The balanced scorecard framework enables managers to do which of the following?

communicate and link the strategic vision translate the strategic vision into operational goals implement feedback and organizational learning

capability of level 1 managers

contributes through knowledge, motivation, and skills

An important requirement for increasing economic value creation under a differentiation strategy is to ______.

control costs

Which of the following determine a firm's competitive advantage?

cost position relative to competitors value position relative to competitors

level one managers offer

helpful and effective input

which of the following questions is involved in functional strategy implementation

how do we put our business strategy into action

functional strategies answer

how to implement

A balanced scorecard is a tool for strategy

implementation

A firm's competitive advantage is determined jointly by _____________ and firm effects.

industry effects

When the high market valuation of internet-based firms, such as Facebook or Google, is analyzed, the importance of ______ becomes clear.

intangibles

In a focused cost-leadership strategy, a firm provides ______.

low-cost products to a niche market

Raoul is starting a new cosmetics company. His focus is on what he believes is a game-changing lipstick. He wants the lipstick to be accessible to everyone, but the manufacturing costs are higher than he had anticipated. If Raoul wants to achieve his desired strategic position of value creation at an affordable cost, he will need to ______.

make strategic trade-offs

product-oriented vision statement tends to limit a

managers flexibility and ability to adapt

Which of the following are offered by a balanced scorecard?

measures of internal processes common financial metrics operational measures on customer satisfaction

Since about the year 2000, assets not captured in firms' accounting data have become ______ to a firm's competitive advantage.

much more important

Whereas the firm's strategic position can be considered either differentiated or cost-focused, the scope of competition is considered ______.

narrow or broad

When a person decides to quit their job and start a company, the salary that person gave up when quitting can be considered

opportunity cost

______ allows for bottom-up strategic initiatives to occur within a company and to be reviewed by executives.

planned emergence

Rodney is making decisions about his newly formed business. He wants to focus on producing the highest-quality product in the market so he can maximize the product's value to customers. This will cause his product to have higher costs than others already in the market, but Rodney believes customers will pay more for the higher-quality product. Rodney's choice to use a differentiation business-level strategy is determining his company's strategic ______.

position

A differentiation strategy is typically associated with ______ pricing

premium

As a consequence of the rapid development of business models, ______ may breach existing rules of commerce.

producers

The ______ determines whether to pursue a specific narrow part of the market or to go after the broader market.

scope of competition

The owner of small hotel resort would like to advertise in major American newspapers and magazines as a part of a larger strategy, but lacks the money to do so. One day, the hotelier meets the owner of a group of newspapers and magazines, who offers advertising space in exchange for a stay at the hotel. This is an example of which of the following?

serendipity

______ describe(s) random events, pleasant surprises, and accidental happenstances that can have a profound impact on a firm's strategic initiatives.

serendipity

When a trade occurs, the consumer and producer both capture

some of the economic value

vision statements and firm performance are

sometimes associated with each other

According to ______ theory, a firm exists within an interconnected network of constituencies, both within and outside the organization, and the firm is responsible to these constituencies.

stakeholder

the goal are using the AFI strategy framkework for scenario planning is to create

strategic plans that are flexible

Choosing a business-level strategy helps to define a firm's ______ in a given product market.

strategic position

level 2 managers are considered a contributing

team member

Which of the following are examples of black swan events?

the 9/11 terrorist attacks the Fukushima nuclear disaster the accounting scandal at Enron

The major assumption in the top-down strategic planning process is that Blank______.

the future can be predicted based on the past

which of the following is a capability that a level 2 manager typically exhibits?

the manager is capable of working effectively with others to accomplish common objectives

The resource-allocation process (RAP) can be designed to support planned emergence. t/f

true

Economic value creation is calculated as

the sum of consumer and producer surplus

which conditions are most likely to foster a positive relationship between vision statemetns and firm performance

the vision statements are customer oriented. organizational structures align with vision statements. internal stakeholders are invested in defining the vision.

for CEOs, what is an advantage of face to face meetings?

they allow CEOs to effectively communicate their ideas and positions

produt-oriented companies have less flexibility to meet consumer needs. this is why

they are less effective than customer oriented

whast distinguishes a level 5 manager from other levels of leader

they create enduring greatness

Because external factors create volatility in stock prices, a better measure of a firm's performance over the long term is the

total return to shareholders

Wholesaling is considered a(n) ______ business model.

traditional

For a balanced scorecard to be effective, managers must do which of the following?

translate their strategy into measurable objectives manage objectives according to the balanced-scorecard approach formulate an effective strategy for achieving competitive advantage

Which of the following frameworks work to provide a more holistic perspective on firm performance?

triple bottom line balanced scorecard

Determining the products the customer wants and needs answers the ______ question of competition.

what

Which of the following makes it more likely that producers will breach existing rules of commerce when responding to rapid developments in business models?

when the business models are disruptive

a positive relationship between vision statements and firm performance is more likely to exist

when the visions are customer oriented

To formulate an appropriate business-level strategy, managers must answer the ______ questions of competition.

who, what, why, and how

SBUs are a standalone division of a larger conglomerate

with their own profits and losses

Which cognitive bias involves individuals agreeing with a leader without critically evaluating or challenging the leader's views and assumptions?

groupthink

Which of the following are the key questions for understanding the balanced scorecard?

How do shareholders view us? What core competencies do we need? How do we create value? How do customers view us?

At 3M, one strategic objective that has been implemented is that 30% of revenues must be obtained from new product introductions. This is an objective that would arise as an answer to which of the following balanced scored questions?

How do we create value?

Which of the following are among the standard dimensions for measuring competitive advantage?

economic value accounting profitability shareholder value

True or false: When a user values two products equally, they are negatively correlated.

false

Critics of the more formalized strategic planning approaches proposed a framework that accounts for which of the following realities?

Strategy can emerge from the bottom up. Strategy can be planned.

What cognitive bias involves using simple examples to make sense out of complex problems, even though the things being compared may be very different on a deeper level?

reason by analogy

What cognitive bias is in play when individuals draw conclusions based on very small samples or a single anecdote, thus violating the law of large numbers?

representativeness

A(n) ______ requires making a choice between a cost position and a value position.

strategic trade-off