MAN 4720 Test 3
21. Global strategy is a firm's strategy to gain ________ when competing against foreign companies around the world. A. Competitive advantage B. A home-based market C. High-quality labor D. Shareholder value
A
21. When a firm successfully commercializes a new product or service, it is able to extract temporary ______________ but must continue to innovate to sustain competitive advantage(s). A. Monopoly profits B. Industry acknowledgements C. Lower costs of capital D. Competitive parity
A
22. According to Strategy Highlight 10.1, when all important business functions are located in the home country and only sales and distribution take place overseas, what stage of globalization is this? A. Globalization 1.0 B. Globalization 2.0 C. Globalization 3.0 D. Globalization 4.0
A
24. Globalization 1.0 in Strategy Highlight 10.1 is similar to which one of the following strategies? A. International strategy B. Global standardization strategy C. Transnational strategy D. Localization strategy
A
24. When management modifies strategic objectives based on which stage an industry is in they are responding to a(n): A. Industry life cycle. B. Growth life cycle. C. Economic life cycle. D. Entrepreneurial life cycle.
A
25. The fact that both Rolex and Timex have a competitive advantage selling wristwatches is an indication that: A Following a different generic business strategy within the same industry can lead to a competitive . advantage for more than one organization. B Following the same generic business strategy can allow for two firms competing in the same industry to . haveacompetitiveadvantageatthesametime. C In order to evaluate whether Rolex has a sustained competitive advantage it is useful to compare it to . Timex from a cost perspective. D In order to evaluate whether Timex has a sustained competitive advantage, it is useful to compare it to . Rolex from a differentiation perspective.
A
27. A firm's strategic position reflects: A. Whether it is competing on differentiation or cost. B. Whether it is competing within a targeted strategic group or not. C. Whether is has a competitive advantage or not. D. Whether it has first-mover advantages or not.
A
29. What is the main reason that Globalization 2.0 practices have faded over time? A. Substantial FDI for the duplication of home-based business functions induced a waste of resources. B. Decoupled strategic business units induced a higher cost of coordination. C. Distrusting relationships with suppliers induced an increased cost of procurements. D. A lack of understanding of local cultures caused a higher cost in distribution and sales.
A
29. ___________ and ____________ are the two focused generic business strategies. A. Focused differentiation; focused low-cost B. Integration; focused low-cost C. Integration; focused differentiation D. Cost leadership; differentiation
A
30. Although there are "first-mover advantages" when it comes to bringing a new innovation to the market, there are also disadvantages. Which of the following is NOT one of these disadvantages? A. The firm builds a reputation as an innovator. B. Potential customers must be educated about the product. C. Distribution channels must be found. D. Complementary assets need to be located.
A
30. Firms with core competencies that can be exploited across international markets are able to ______________________________. A. Achieve synergies and produce high quality goods at lower costs B. Enter new markets more quickly C. Enhance their market image and brand loyalty among local consumers D. Meet local government requirements more quickly than their international competitors
A
36. During the growth phase of an industry life cycle, demand is strong and: A. Both inefficient and efficient firms thrive. B. A firm should "harvest" its products. C. Only a cost leadership strategy should be pursued. D. Market demand starts to decrease.
A
38. The major disadvantages of expanding internationally is ________________. A. Liability of foreignness B. Cultural compatibility C. Technology availability D. Knowledge complementarity
A
40. Generally, as the level of _________ innovation declines, the level of _________ innovation increases. A. Product; process B. Process; procedural C. Incremental; drastic D. Efficient; inefficient
A
40. Value drivers are tools that help managers: A. Increase perceived value and decrease costs. B. Improve value chain activities and increase costs. C. Achieve a low-cost position and maintain perceived value. D. Achieve cost parity and maintain perceived value.
A
41. During the later part of the growth stage, many firms turn to ____________ to bring more customers into the market. A. Lower prices B. Diversification C. Imitation D. Radical innovation
A
43. The major benefit of having established national institutions is ___________. A. Reduced uncertainty and cost B. Higher entry barriers C. Cultural compatibility D. Less competitive dynamics
A
45. When pursuing a cost-leadership strategy, a business must remember that: A. Buyers will be reluctant to pay for a product unless the quality is acceptable. B. Buyers will be reluctant to pay for a product unless the quality is superior. C. Buyers will be reluctant to pay for the product unless it is customized. D. Product quality is more important in a broad market than in a narrow one.
A
46. IBM still offers typewriters even though it does not invest much in future innovations of its typewriter line. Instead, it has chosen a _________ strategy to maximize cash flow from the remaining demand for typewriters. A. Harvest B. Divest C. Exit D. Consolidate
A
47. When the degree of power distance in a particular culture is ______, people tend to allow more inequalities and transform to their own benefits. A. high B. low C. equal D. usual
A
49. National culture refers to: A. The collective mental and emotional programming of the mind that differentiates human groups. B. Universal customs and habits within the country. C. Changes of political regimes for each country. D. None of these.
A
51. Achieving differentiation parity can be difficult for a cost leader firm because: A. Creating value generally means higher costs. B. Achieving parity in the market is always hard. C. Cost leaders typically add too much value to their products. D. Value chain activities should not be altered.
A
53. Entrepreneurs generally produce which type of innovation? A. Radical B. Speculative C. Reverse D. Incremental
A
53. In high-power distance cultures, people tend to: A. Translate inequalities in power, status, and wealth. B. Create equal distribution among people. C. Adapt to new environments quicker. D. Embrace change and seek new opportunities.
A
55. When an existing firm uses the tools and concepts learned from strategic management in order to pursue innovation, it is said to be engaging in: A. Strategic entrepreneurship. B. Strategic invention. C. A strategic venture. D. A short-term strategy.
A
58. The vast majority of innovations in an industry are ____________ because they build on a firm's existing knowledge base and reinforce the existing organizational structure and network relationships. A. Incremental B. Radical C. Relational D. Moderate
A
59. The ZIP drive for data storage is an example of a(n) ___________ innovation that began as a low-cost solution to an existing problem. A. Disruptive B. Technical C. Radical D. Advanced
A
60. The X-ray is an example of a(n) ___________ innovation. A. Radical B. Incremental C. Drastic D. Fundamental
A
60. When a business drives costs down as its cumulative output increases, it is referred to as: A. A learning curve. B. An output curve. C. A demand curve. D. A distribution curve.
A
60. When a firm faces high pressure for local responsiveness and high pressure for cost reduction, it is likely to adopt a(n) _____________. A. Transnational strategy B. Localization strategy C. Global-standardization strategy D. International strategy
A
62. According to the integration-responsiveness framework, if a firm is facing low pressure for local responsiveness and low pressure for cost reductions, the firm is likely to adopt a(n) _________. A. International strategy B. Localization strategy C. Global-standardization strategy D. Transnational strategy
A
63. One disadvantage noted in the text of an international strategy is _______________. A. The expropriation of intellectual property by foreign competitors B. The high distribution cost for firms operating internationally C. The low market presence, since there is low response to local markets D. Diminishing returns on any increasing marginal sales
A
65. When the Japanese company Canon was able to redesign the copier and take market share away from Xerox, it was using which type of innovation? A. Architectural B. Groundbreaking C. Radical D. Intentional
A
66. Digital photography replacing film photography is an example of which type of innovation? A. Disruptive B. Incremental C. Progressive D. Alternative
A
66. Under the five forces model, a risk to a firm with a differentiation strategy is: A When the focus of competition switches to price rather than features and new acceptable levels of . quality have emerged due to innovation. B When the focus of competition switches to price rather than features and the substitute products are . consideredbelowacceptablelevelsofquality. C When the focus of competition switches to features rather than price, the substitute products are . consideredbelowacceptablelevelsofquality. D When the focus of competition switches to features rather than price and new acceptable levels of . quality have emerged due to innovation.
A
67. International strategy focuses on: A. The scale of operations through both product and geographic diversification. B. Competition within each country. C. Economies of scale and scope for the firm. D. The sophistication of monitoring and controlling systems.
A
69. Transnational strategy promotes innovation because of: A. Effective global learning. B. The standardization of the operation process. C. Economies of scale and scope. D. Easier access to natural resources.
A
71. According to Strategy Highlight 7.4, GE's success with portable ultrasound devices is attributed to which type of innovation? A. Reverse B. Backward C. Internal D. Diversified
A
72. Harley Davidson offers similar products in many different global markets by using a(n) ____________. A. International strategy B. Localization strategy C. Global-standardization strategy D. Transnational strategy
A
72. When it comes to pursuing an integration strategy, managers manipulate both _____ and ________ drivers. A. Cost; value B. Cost; core capability C. Value; core capability D. Market; economic
A
73. Innovation is important when pursuing an integration strategy because: A. It helps a firm resolve existing trade-offs between price and quality. B. Without innovation a firm can get "stuck in the middle." C. Innovation is the most important component regardless of strategy. D. It is the only way that a firm can improve its value chain activities.
A
73. Strategic initiatives that a firm can use to counter disruptive innovations in the industry include all of the following EXCEPT: A. Improve the product or service value perception by increasing prices. B. Stay "ahead of curve" by incremental innovation. C. Protect the low end of the market by introducing low-end innovations. D. Use the needs of emerging markets to reverse innovate.
A
75. When a firm applies its current knowledge in order to enhance short-term performance, it is using _________. A. Exploitation B. Learning-curve effects C. Economies of scope D. Strategic trade-offs
A
76. A reason for a country's development of advanced and specialized factors of production is often its ___________. A. Lack of a critical resource B. Small workforce C. Protective tariffs D. Monetary wealth
A
77. A large domestic market can provide the country's industries with a chance at dominating the world market because _____________. A. They have been able to develop economies of scale at home B. They have access to abundant resources C. The related and supporting industries will have been developed D. They have cultural compatibility
A
77. A positive implication of the disruptive force of the Internet for a firm is: A. That there is almost a limitless low-cost shelf-life for product offerings. B. That the digitization of products leads to market confusion. C. That target markets can no longer be segmented. D. That "going digital" makes a firm's product easier to imitate.
A
80. An integration strategy differs from a low-cost strategy in that: A The intent of an integration strategy is not to be the absolute lowest-cost provider because of the added . costsofincreasedvalueinitsproducts/service. B A successful integration strategy requires that the business be the lowest-cost provider in order to drive . highervaluecreationthanthecompetition. C.Economy of scale is more important to an integrator, while economy of scope is more important to a low-cost strategy. D.An integration strategy requires first that the business be stuck in the middle, while a low-cost strategy avoids this condition.
A
80. Japan, due to a lack of undeveloped land, would be an unusual choice of location for a U.S. cattle company to set up local grazing operations. This limiting factor would be identified in what part of Porter's determinants of national advantage? A. Factor condition B. Demand condition C. Supporting industry D. Firm strategy and structure
A
82. High competitive intensity in the focal industry is advantageous for many MNEs because _________________. A. It forces MNEs to be more prepared for intense global competition B. It helps MNEs lower operation costs C. It encourages mergers and acquisitions D. It encourages organizational reengineering
A
85. Which one of the following can be considered a characteristic of a cluster? A. Location economies B. Low-cost labor C. High living standards D. Well-established telecommunication
A
91. Discontinuities generally favor ___________ because they don't have entrenched processes and technologies. A. New entrants B. Incumbents C. Conglomerates D. Diversified firms
A
98. According to Michael Porter, firms face hypercompetition because they rely too much on _______________, which leads to a failure of distinct strategic positioning for the individual firm. A. Imitating one another B. Reaching technological limitations C. Joint destruction D. Creative competition
A
A generic business strategy is more likely to help a cost-leadership firm achieve competitive advantage when it does which one of the following? A. Allows a firm to perform similar activities differently than its rivals with resulting lower costs B. Allows a firm to perform different activities than its rivals with greater value creation C. Allows a firm to perform similar activities than its rivals with greater costs or lower value creation D. Helps a firm create as large a gap as possible between the differential value created and the cost required
A
When the CEO of Whole Foods, John Mackey, had to make decisions about the company's cost structure and value position he was: A. Making strategic trade-offs. B. Conducting a strategic group map evaluation. C. Trying to improve the firm's economies of scope. D. Leveraging the low-cost position of the company.
A
17. The movie Slumdog Millionaire's budget was $14 million dollars, which is low compared to other Hollywood blockbusters. What was the movie's international focus? A. Local responsiveness B. Low cost factors C. Reduced proximity D. Crowdsourcing
B
18. The Wright Brothers creating the airplane is a(n) ______________; Boeing commercializing the airplane is a(n) _____________. A. Breakthrough; invention B. Invention; innovation C. Innovation; invention D. Product; process
B
19. When a new product, process, or idea is introduced into the market, it has been: A. Extracted. B. Commercialized. C. Invented. D. Executed.
B
23. Globalization 1.0 from Strategy Highlight 10.1 is similar to which of the following international entry modes? A. Licensing B. Export C. Strategic alliance D. Greenfield investmen
B
24. When a firm offers products with unique features and higher value for customers than that of the competition, it is implementing a: A. Product-broad strategy. B. Differentiation strategy. C. Cost-leadership strategy. D. Product-focused strategy.
B
26. Each of the following are important reasons to understand the strategic implications of an industry life cycle EXCEPT: A. Each stage attracts different customer groups with unique needs. B. The firm should copy the industry leader in each distinct stage. C. Different competencies are required in each stage that must be created if not existent. D. The firm needs to know when changes in demand require changes in strategy.
B
27. A core competency which is capital-intensive but critical for a firm creating and launching a new innovation is: A. Process improvement. B. Research and Development (R&D). C. Supply-chain management. D. Customer relation management.
B
28. The type of customers vital to a firm introducing a new innovation are the _________, who are willing to pay higher prices and like to tinker with new products. A. Late adopters B. Early adopters C. Early laggards D. Late majority
B
31. After the Internet was introduced, its value increased exponentially as the number of users increased. This is the positive effect of a(n): A. Adopter force. B. Network effect. C. User effect. D. Internet force.
B
31. Moving into international markets is a particularly attractive strategy to firms whose domestic markets: A. Demand a differentiation strategy for success. B. Have entered the mature stage on the industry life cycle. C. Have fewer competitors. D. Have high import tariffs and regulations.
B
31. Tesla Motors, maker of electric cars, is an example of a firm using what type of generic business strategy? A. broad low-cost B. focused differentiation C. focused low-cost D. broad differentiation
B
34. When the focus of competition is on differentiation, a firm tends to use all of these levers EXCEPT: A. New product launches. B. Cost input factors. C. Marketing and promotion. D. Unique product features.
B
36. A company that uses a differentiation strategy achieves a competitive advantage as long as: A. The economic value that the firm creates is equal to that of the competition. B. The economic value that the firm creates is greater than that of the competition. C. The economic value that is created is less than that of the competition. D. The economic value that is created is dependent on strategic parity.
B
37. Six Sigma, lean manufacturing, and genetic engineering are examples of ___________ that deliver new ways to produce or deliver existing products or services. A. Procedural changes B. Process innovations C. Entrenched standards D. Trial innovations
B
37. When a firm is able to achieve higher economic value creation than its competition through differentiation, the competitive advantage is reflected by: A. The firm's ability to move into a new strategic group. B. The firm's ability to charge higher prices. C. The firm's ability to charge lower prices. D. The firm's ability to leverage complements.
B
37. Why might going global be necessary to achieve growth in smaller economies like South Korea? A. High intensity of local competition B. Limited domestic market C. Abundant local suppliers D. Plentiful natural resources
B
39. As evidenced by the European Union determining that GSM should be the industry standard for cell phones, dominant designs can be driven by top-down decisions made by: A. Consumer agencies. B. Government bodies. C. Local activists. D. Cultural groups.
B
42. In 2010, Levi Strauss & Co introduced a new line of jeans called Levi's Curve ID. Levi's launched this product based on research that found that 80 percent of women fall into three distinct body shapes. Customers can now go to Levi's website and use a product configurator in order to determine their "Curve ID" and purchase jeans most appropriate for their body type. Levi's is using what tool to improve their strategic position? A. A product differentiation strategy with complements as a value driver. B. A product differentiation strategy with customization as a value driver. C. A focused cost leadership with economies of scale as a cost driver. D. A focused cost leadership with economies of learning as a cost driver.
B
43. Which of the following strategies do firms typically employ as competitive intensity increases and the market matures? A. Turning to radical innovation in order to introduce a new product B. Employing manufacturing and process engineering capabilities to drive costs down C. Charging high prices in order to capture as much revenue as possible D. Adding additional features to the offering to increase perceived value
B
45. ___________ deal(s) with inequality among people in terms of physical and intellectual capabilities. A. National institutions B. Power distance C. Individualism D. Core competenc
B
46. In Strategy Highlight 6.2, Ryanair is aggressively pursuing a cost-leadership position in Europe. Which of the following cost drivers are primarily used by Ryanair in the text? A. Economies of scale B. Cost of input factors C. Experience-curve effects D. Learning-curve effects
B
47. ___________ makes the process of "creative destruction" happen by replacing existing goods, services, and processes with newly created ones. A. Engagement B. Entrepreneurship C. Venturing D. Speculation
B
48. _______ focuses on the relationship between genders and its relation to an individual's role at work and society. A. Uncertainty avoidance B. Masculinity-femininity C. Individualism D. Power distance
B
50. Achieving differentiation parity along with lower costs is important to a low-cost leader because: A. The firm is then able to target a less price-sensitive customer market. B. Creating the same value as the competition, combined with lower costs, gives the firm a competitive advantage. C. The firm is then able to incorporate differentiating features that cause buyers to prefer its products. D. All of these.
B
50. The process of __________ turns an invention into an innovation. A. Integration B. Commercialization C. Diversification D. Exploitation
B
51. The commercialization of new ideas and inventions often does all of the following EXCEPT: A. Creates value for society. B. Protects older industries. C. Disrupts an industry. D. Creates employment opportunities.
B
54. After Jeff Bezos read about how the Internet was growing by 2,000 percent a month, he set out to use the Internet as a new distribution channel and created Amazon, which is now the world's largest online retailer. This is clearly an example of: A. A firm with a strong core competency in R&D. B. An entrepreneur who transformed invention into an innovation. C. An entrepreneur who tried to harvest the remaining demand on the Internet. D. Someone who focused on the "short head" of the Internet.
B
54. There are several cost drivers that can be managed in order to establish a low-cost leadership advantage. One of the basic cost drivers is: A. Access to unique features that turn commodities into differentiated products. B. Access to lower-cost input factors including raw materials and labor. C. Creating personalized customer service in order to minimize price-sensitivity. D. Shifting to small-scale production processes in order to create customized products.
B
56. Between 2007 and 2009, Microsoft spent close to $25 billion on R&D, the majority of which went to its new Windows 7 operating system. These costs were fixed. However, after Windows 7 hit the market, the marginal costs were basically zero. Since Microsoft expects to sell several hundred million copies of Windows 7, it can be said that: A. Microsoft has a competitive advantage because it has already spent the capital required for its new offering. B Microsoft has a competitive advantage because it will be able to drive down per-unit costs of Windows . 7witheachadditionalcopyitsells. C. Since Microsoft will sell so many units of Windows 7, it has attained competitive parity within its strategic group. D.Microsoft will be at a competitive disadvantage unless it exceeds its sales forecasts because its marginal costs will change.
B
56. When engaging in strategic entrepreneurship an existing firm is often able to: A. Introduce radical innovations into the market. B. Exploit new or existing opportunities through innovation. C. Ignore its known core competencies. D. Keep costs low.
B
57. A U.S. manufacturer of adaptive devices for persons with disabilities is considering expanding internationally. It is a fairly small company, but it is looking for growth opportunities. This company should primarily consider the option of: A. Licensing. B. Exporting. C. A strategic alliance. D. A greenfield strategy.
B
57. When a firm steadily improves its offerings by building on its knowledge base, it is engaging in: A. Architectural entrepreneurship. B. Incremental innovation. C. Disruptive entrepreneurship. D. Radical innovation.
B
58. One of the reasons that big box retailers like Home Depot are able to achieve economies of scale is that: A. They have both broad and narrow economies of scope. BThey are able to take advantage of physical properties and maximize their scale efficiencies by stocking . more merchandise and handling inventory more efficiently. C. They are able to take advantage of market size and spread investment losses over many locations. D. They have been able to protect themselves from the threat of buyer power by increasing input prices.
B
59. Achieving economies of scale is an important cost driver for certain low-cost leaders. However, there is a saying that "sometimes bigger is worse" because at some point costs increase as output increases. This is referred to as: A. External economies B. Diseconomies of scale C. Economic inefficiencies D. Integration diseconomies
B
62. According to the text, which event played a role in the innovator CNN losing its leadership position in the 24-hour cable news industry? A. The downturn in the economy impacting media firms B. "Second movers" using incremental innovation to continuously improve their offering C. Not investing enough resources into R&D and satellite technology D. Becoming too diversified and losing strategic focus
B
62. Experience curves attempt to capture both _______________ and learning effects. A. Customization B. Economies of scale C. Economies of scope D. Competitive position
B
64. Under the five forces model, a risk to a business with a cost-leadership strategy is: A. Competition switches from customer service to pricing. B. When technological innovations open up cost reductions for substitutes or competitors. C. New entrants are all start-up firms with low volumes. D. Suppliers request a 2% price increase across the industry.
B
65. A global standardization strategy emphasizes _____________. A. Differentiated products B. Economy of scale C. Decentralizing control D. Adapting to new cultures
B
67. When pursuing a differentiation strategy, a firm must remember that: A. Buyers will be willing to pay for value that is not perceived. B. Buyers will be reluctant to pay for value that is not perceived. C. Perceived value is not as important as the price of the product. D. Perceived value is more important in a broad market than in a narrow one.
B
68. The Swiss-based Nestlé offers a wide variety of different products to foreign markets because of: A. International strategy. B. Localization strategy. C. Global-standardization strategy. D. Transnational strategy.
B
70. A disruptive innovator attacks from the "bottom up" because of all of the following EXCEPT: A. Incumbent firms often fail to defend the low end of the market. B. The industry is generally in the maturity stage by the time a disruptive innovation is introduced. C. The gaps in quality at the time of introduction necessitate lower prices. D. Competing in the low end gives a firm time to gain market expertise.
B
71. When pursuing an integration strategy, managers use levers to help them simultaneously increase perceived value and lower costs. Which of the following is NOT one of these levers? A. Quality B. Complements C. Economies of scope D. Structure, culture, and routines
B
72. GE disrupted itself by: A. Replacing the top levels of the executive hierarchy. B.Using the needs of developing countries to replace older and more expensive products with newer and more adaptive ones. C. Saturating the global market by having too many products in each market. D. Losing strategic focus and not protecting its market share in health care technology.
B
74. The disruptive force of the Internet provides opportunities due to the ____________ phenomenon, which allows for customer and product niches to come together online. A. Proportion tail B. Long tail C. Incremental market D. Bottom-up
B
79. Buy Us is a big box retailer who is in direct competition with Walmart and Target. Buy Us initially tried to respond to Walmart by cutting its prices and reducing costs. Walmart has greater buying power and a more efficient supply chain, therefore Buy Us was not able to compete on costs. The company then tried to differentiate itself by signing a celebrity to create an in-house line of clothing. However, Target has a celebrity clothing line that has a more differentiated appeal. The economic value created by Buy Us is currently less than Target and Walmart. It can be said that: A. Buy Us is successful in creating an integration strategy positioned between Walmart and Target. B. Buy Us is "stuck in the middle" and has a competitive disadvantage. CBuy Us is still creating an integration strategy positioned between Walmart and Target and is on the . right track. It should continue this business strategy. D. Buy Us is "stuck in the middle" and has a competitive advantage.
B
80. Which of the following is most successfully innovating to overcome the problem of "thin markets"? A. Macy's B. eBay C. Gillette D. Walmart
B
81. The Middle East has been a popular choice for oil companies because of sufficient ___________. A. Demand conditions B. Factor conditions C. Supporting industries D. Competitive intensity
B
83. When a firm has been able to perform best practices combined with a positive value-cost relationship, it has reached the: A. Value-cost frontier. B. Productivity frontier. C. Economies of scope. D. Strategic intent.
B
83. Which of the following is an example of a discontinuity that has happened in the past? A. McDonald's introducing the Happy Meal B. Propeller airplanes being replaced by supersonic jets C. The Apple iPhone 2G being replaced by the 3GS D. Starbucks selling its goods in China
B
85. Apple, Dell, and HP are used as examples in the text for the dynamics of competitive positioning. What does this analysis tell us about these firms? A. There has been relatively little change in the positions of these firms from 2005 to 2010. B. Apple is the only one of the three to remain on the productivity frontier from 2005 to 2010. C. HP's position has declined on the frontier from 2005 to 2010. D. Dell has improved its position on the frontier from 2005 to 2010.
B
85. The likelihood of a discontinuity occurring in an industry: A. Is very strong if the industry produces simplified products. B. Is very strong if the existing technology is close to its physical limit. C. Is very weak unless the new technology is cheaper. D. Cannot be predicted.
B
87. A(n) ________ occurs during the time when existing technologies reach their limitations and several new technologies enter the fray. A. Industry slow-down B. Swarm of technology C. Loss of industry profits D. Innovation breakdown
B
87. The productivity frontier provides a theoretical reflection of the possible best practices at any given time. Why is this an important tool for managers? A. Because any strategic tool that a manager has at their disposal is useful. B. Because strategic positioning is dynamic and firms have to refine their positions over time. C. Because a firm always wants to stay behind the productivity frontier. D. Because a firm wants to make sure it is ahead of best practices.
B
88. When it comes to strategic positioning and generic business strategies, which of the following is TRUE: A. All of the business strategies are equally difficult to adopt. B.Only a few exceptional firms are able to balance the value-cost strategic trade-offs and adopt an integration strategy successfully. C. Once a firm has established itself with a strategy, it should stick with what it knows. D. Strategic positioning is not as critical to competitive advantage as is the firm's resources and economic environment.
B
89. Absorptive capacity is important for a firm to have because: A. It must be able to absorb losses during the growth stage. B. Without new knowledge the firm could face a "technological lock-out." C. Profits will increase if there is excess capacity in the industry. D. Lean manufacturing is no longer a strategic weapon.
B
90. When new technologies emerge, old ones: A. Get eliminated. B. May improve due to the competitive pressure. C. Remain the same for established firms. D. Are no longer useful.
B
96. After long periods of competition and innovation, a(n) ____________ is required to "restart" an industry. A. Government intervention B. Radical innovation C. Imitation process D. Reverse process
B
All of the following are questions that managers answer when selecting a business-level strategy EXCEPT: A. Who will we serve? B. How many product markets will we be in? C. What customer needs and desires will we satisfy? D. Why do we want to satisfy these needs?
B
The two primary competitive levers that managers can use in order to answer the question of how to compete are: A. Cost and core competencies. B. Value and cost. C. Value and core competencies. D. Cost and revenues.
B
16. As noted in ChapterCase 7, the success of Wikipedia is attributed to all of the following EXCEPT: A. Leveraging innovations enabled by the Internet. B. Utilizing crowdsourcing. C. Ignoring the "long tail." D. Maintaining a reputation for accuracy.
C
17. Wikipedia's "open source" approach to competitive advantage will be sustainable as long as: A. The market isn't saturated with book-based encyclopedias. B. Another firm doesn't introduce a CD-based encyclopedia. C. People are willing to volunteer to contribute content. D. All of these.
C
18. International strategy refers to: A.An action plan pursued by American companies to compete against foreign companies operating in the United States. B. A political and economic action plan developed by businesses and governments to cope with global competition. C.Leveraging home-based core competencies by selling the same products or services in both domestic and foreign markets. D. The high entry barriers of the home market.
C
20. The word processor brought more perceived value to the market and replaced the typewriter as the industry standard. Later, the word processor industry was undone by the computer industry which created even more value. This is an example of: A. The "ups and downs" of an economic cycle. B. A shortened industry life cycle. C. The positive and negative aspects of creative destruction. D. The effects of diversification.
C
25. Each of the following are a distinct phase in an industry life cycle EXCEPT: A. Growth B. Introduction C. Plateau D. Maturity
C
26. Globalization 2.0 requires significant ________ when initiating business operations overseas. A. Strategic alliances B. Joint ventures C. Foreign direct investment D. Core competencies
C
26. When management decides whether to pursue a broad market position or a narrow market position, they are defining the: A. Economies of scale. B. Economies of scope. C. Scope of competition. D. Scope of core capabilities.
C
27. The degree of CORE COMPETENCIES increased in a firm when adopting Globalization 2.0 is ________. A. High, because firms can acquire knowledge from all over the world. B. High, because firms can acquire high quality labor from all over the world. C. Low, because firms still have limited knowledge flow back to headquarters. D. Low, because firms do not need to increase their core competencies.
C
28. Nike is headquartered in the U.S., outsources its manufacturing to Asia, has an extensive distribution network that covers the entire world, and has extremely high brand name and product exposure around the globe. What stage of globalization is Nike using in this example? A. Globalization 1.0 B. Globalization 2.0 C. Globalization 3.0 D. Globalization 4.0
C
29. Intel and Apple are innovators who entered the market during the introduction stage of an industry life cycle. All of the following are characteristics of this stage EXCEPT: A. Differentiation is the basis of competition. B. Network effects increase the value of the offering. C. Keeping costs low is the main objective. D. Achieving market acceptance is critical.
C
30. Rolex focuses on a small market segment, affluent consumers who want to present a certain image. What is the appropriate name for Rolex's scope of competition? A. Broad B. Market segmented C. Narrow D. Targeted
C
32. As noted in Strategy Highlight 7.1, _______________ has created part of the growth of the Apple iPhone due to the apps that are available to users. These apps increase the value of the iPhone and thus more people want to own an iPhone with apps. A. Ignoring the role of complements B. Apple's low-cost strategy C. The leveraging of network effects D. The targeting of "laggards"
C
32. _____ drivers are as important to a differentiation strategy as ________ drivers are to a cost-leadership strategy. A. Scope; quality B. Quality; learning C. Value; cost D. Learning; experience
C
33. AstraZeneca, a Swiss pharmaceutical firm, relocated its research facility to the Boston biotech cluster. This is because they want to ___________. A. Gain access to low-cost input factors B. Gain access to foreign markets C. Develop new competencies D. Enjoy low tariffs
C
35. Interface is a leader in sustainable and innovative carpeting, as evidenced by its Cool Carpet product, the world's first carbon-neutral floor covering. Its product is unique and has appealing customer attributes. If Interface raw material costs increased by 12% this year, what would be the likely outcome? A. Interface would lower profit margins to absorb this cost increase. B. The company would launch an all-out effort to reduce other costs by 12%. C. Interface would pass a major portion of this increase along as a price increase to its customers. D.Interface would seek to find other materials with lower costs, even if it meant losing the carbon-neutral label on the product.
C
35. The group of customers referred to as the ___________ lead the wave of increased demand as the industry moves from the introduction stage to the growth stage. A. Laggards B. Experimenters C. Early majority D. Innovators
C
36. China is a popular target for MNEs, but it is NOT because of ___________. A. Low-cost input factors B. High market potential C. Their information censorship policy D. The high-quality labor pool there
C
38. After an industry has established a dominant design and the industry is in the growth stage, the basis of competition turns to: A. "Price skimming" the market. B. Reducing processes and procedures. C. How to better produce a product or deliver a service. D. How to diversify the firm
C
38. _________ and __________ are two of the value drivers that managers can utilize when trying to improve a firm's differentiation strategic position. A. Co-opetition; complements B. Learning-curve effects; co-opetition C. Customer service; complements D. Economies of scale; co-opetition
C
41. A phenomena of having an optimal geography for a specific activity is called _______. A. Crowdsourcing B. Knowledge sharing C. Location economies D. Outsourcing
C
42. During the _______ stage of an industry life cycle, market demand is at a minimum and competitive intensity increases. A. Introduction B. Innovative C. Maturity D. Disruptive
C
43. A low-cost leader optimizes all of its ___________ in order to achieve a low-cost position. A. Five forces activities B. Strategic group activities C. Value chain activities D. Economic chain activities
C
44. A company that uses a cost-leadership strategy achieves a competitive advantage as long as: A. The economic value that is created is less than that of the competition. B. The economic value that the firm creates is equal to that of the competition. C. The economic value that the firm creates is greater than that of the competition. D. The economic value that is created is dependent on strategic parity.
C
44. Which of the following is NOT true about the decline stage of an industry life cycle? A. Inefficient firms exit the industry. B. "Laggards" are the last consumer segment to enter the market. C. Firms that consolidate and buy their rivals are typically at a disadvantage. D. There is generally excess industry capacity.
C
45. The four best strategic choices available to management during the decline stage of an industry include all of the following EXCEPT: A. Exit the industry. B. Consolidate by buying rivals. C. Persist by increasing investments in the product. D. Harvest by reducing investments and maximizing cash flow.
C
47. All of the following are tools typically used to achieve cost-leadership EXCEPT: A. Controlling the cost of inputs. B. Leveraging economies of scale. C. Offering products that have superior value. D. Learning by doing.
C
48. Entrepreneurial opportunities exist because of all of the following EXCEPT: A. At a certain point, technology and processes reach their limit. B. The market has unmet needs. C. The firm does not believe in risk-taking. D. A new invention can be commercialized.
C
48. The concept of differentiation parity is important in low-cost leadership. A cost leader can gain a competitive advantage when it has lower costs than the competition AND has achieved differentiation parity. What is differentiation parity? A. Creating value that is lower than the competition. B. Creating value that is higher than the competition. C. Creating the same value as the competition. D. Creating products that are highly differentiated relative to the competition.
C
49. Entrepreneurs do all of the following EXCEPT: A. Undertake economic risk. B. Act as change agents. C. Decrease value for society. D. Innovate in products and processes.
C
49. GM and Hyundai offer certain car models that directly compete with each other. Hyundai is able to produce their models at a lower cost while providing similar value at the same time. It can be said that: A. GM and Hyundai have both achieved differentiation parity and competitive advantages. B. GM has achieved differentiation parity and a competitive advantage over Hyundai. C. Hyundai has achieved differentiation parity and a competitive advantage over GM. D. Neither GM nor Hyundai have achieved differentiation parity since they are not in the same strategic group.
C
52. A low-cost firm can still gain a competitive advantage even without differentiation parity as long as: A. Its differentiation appeal is in parity with the competition. B. Its costs are higher than the competition. C. Its economic value creation exceeds that of the competition. D. Its economic value creation is the same as the competition.
C
52. In high uncertainty-avoidance cultures, the values will lean more toward ______. A. Tolerance of ambiguity B. Less emotional resistance to change C. Structured career patterns D. A greater willingness to take risks
C
52. The agents who create change in an industry by introducing new ideas and products are: A. Executives. B. Speculators. C. Entrepreneurs. D. Investors.
C
54. Individualism focuses on _______________________. A. Caring for others B. Creating equality in society C. Personal achievement and fame D. Sharing and the collective good
C
55. Which of the following modes of entering a foreign market has the highest level of investment and control? A. Franchising B. Licensing C. Acquisition D. Exporting
C
56. When a firm chooses to build new plants and facilities from scratch in foreign markets, this is called __________. A. Exporting B. A joint venture C. A greenfield strategy D. Franchising
C
57. Spreading fixed costs over larger output, employing specialized systems and equipment, and ________________ are three primary ways that achieving economies of scale can help a business. A. Increasing capital investments in input factors B. Producing two or more outputs using common resources C. Taking advantage of certain physical properties D. Spreading marginal costs over smaller units
C
59. According to the integration-responsiveness framework, if a firm is facing high pressure for local responsiveness and low pressure for cost reductions, the firm is likely to adopt a(n) _____________. A. Transnational strategy B. Global-standardization strategy C. Localization strategy D. International strategy
C
61. A disruptive innovation leverages _______ technologies, while architectural innovations are based on ________ technologies. A. Existing; new B. Essential; drastic C. New; existing D. Drastic; essential
C
61. When a firm faces low pressure for local responsiveness and high pressure for cost reduction, it is likely to adopt a(n) __________. A. International strategy B. Localization strategy C. Global-standardization strategy D. Transnational strategy
C
63. Relative to the five-forces model, a low-cost strategy is beneficial when: A. Competition is based on product features, suppliers may increase costs, and buyers have bargaining power. B. Competition is based on product features, suppliers have very limited power, and buyers have bargaining power. C. Price competition is vigorous, suppliers may increase costs, and buyers have bargaining power. D. Price competition is vigorous, suppliers have very limited power, and buyers have bargaining power.
C
63. The use of new materials with a new knowledge base to target new markets is a: A. Groundbreaking innovation. B. Trail innovation. C. Radical innovation. D. Modern innovation.
C
67. When Japanese carmakers attacked the existing U.S. automobile market by offering low-cost, fuel- efficient cars based on new technology, they were engaging in ___________ innovation. A. Distinctive B. Radical C. Disruptive D. Stealth
C
68. Disruptive innovations such as the $200 netbook computer do all of the following EXCEPT: A. Target existing markets. B. Incorporate new technology. C. Introduce a radical idea and create a new industry. D. Attack the market from the "bottom up."
C
69. Avon has been able to raise the perceived value of its products while lowering production costs. It has also been able to create more value in relationship to its costs over rivals Revlon and L'Oreal. It can be said that: A. Avon has successfully moved from a differentiation to a cost-leadership strategy. B. Avon has a competitive advantage because it has the features customers value most in the cosmetics industry. C.Avon has successfully achieved an integration strategy and has a competitive advantage because it has higher value creation. D. Avon is the low cost leader of the cosmetics industry with their "sell at home" sales approach.
C
69. The main intention of a firm engaging in architectural innovation is to: A. Utilize new technology to create a new industry. B. Utilize existing technology to steadily improve existing products. C. Utilize existing technology to reconfigure products and create new markets. D. Utilize new technology to disrupt the market with existing products.
C
73. The risks of choosing an international strategy includes all of the following EXCEPT: A. Limited local responsiveness. B. It is highly affected by exchange rate fluctuations. C. Leveraging core competence. D. Legal barriers for expansion
C
74. A firm's structure, culture, and routines are very important when pursuing an integration strategy because organizations have to control costs and allow for creativity that can lead to differentiation. Therefore, managers should try to build an organization that is _________. A. Hierarchical B. Bureaucratic C. Ambidextrous D. Dynamic
C
75. The disruptive innovation of the Internet and the "long tail" phenomenon in the retail industry would be in which category for a SWOT matrix for Barnes & Noble? A. Risks B. Weaknesses C. Threats D. Opportunities
C
78. One of the risks of pursuing an integration strategy is: A. That a firm could lose sight of its mission. B. That this strategy is easy for rivals to imitate. C. That the firm may get "stuck in the middle." D. That it is ineffective when competing on a global scale.
C
79. The four aspects of Porter's model of national competitive advantage include all of the following EXCEPT the: A. Factor condition. B. Demand condition. C. Economic institutions. D. Supporting industry.
C
79. __________ occur when transactions are not likely to take place because it is difficult to bring niche buyers and niche sellers together. A. Blended markets B. Wide markets C. Thin markets D. Diluted markets
C
81. The Tata Group of India is a widely diversified multinational company. In 2008, it bought Jaguar and Land Rover from Ford. It is hoping to leverage the prestige of these brands due to their global reputation. Then, in 2009 Tata introduced the Nano car, which is the lowest-priced car in the world. The rear hatch of the Nano can't be opened, and it has no radio or even a glove compartment. It can be said that the Tata Group of India is: A. Planning to move the Jaguar business unit from differentiated to an integration strategy. B. Pursuing the Chinese market with the Land Rover acquisition. C. Pursuing both a focused differentiation strategy and a focused cost-leadership strategy. D. Planning to move the Nano business unit from low-cost to an integration strategy.
C
82. Discontinuities are periods of time when all of the following occur EXCEPT: A. Many firms experience upheaval. B. Traditional technology is challenged by updated technology. C. Incumbent firms are protected. D. New opportunities exist
C
82. It can be said that the Tata Group is pursuing a(n) _____________ strategy at the corporate level when it comes to automobiles. A. Undiversified B. Unrelated C. Integration D. Linked integrative
C
83. A ________ is a group of interconnected companies and institutions in a specific industry, located near each other and otherwise linked by common characteristics. A. National institution B. National culture C. Regional cluster D. National competitive advantage
C
84. Firms that exhibit _________ and ________ reach the productivity frontier. A. Determination; strategic intent B. Economies; flexibility C. Effectiveness; efficiency D. Innovation; culture
C
92. Continuous innovation, rapid technological changes, and intense competition create: A. Consistency in an industry. B. Product repetition. C. Hypercompetition. D. Sustained competitive advantages.
C
94. All of the following are features of hypercompetition EXCEPT: A. "Creative destruction" and innovation have made competition intense. B. Time periods of competitive advantage have shortened. C. Revenue making potential has increased.
C
95. After an innovator launches a radical innovation, it must follow-up with ___________ innovations in order to protect its original advantage(s) and pre-empt potential rivals. A. Proactive B. Defensive C. Incremental D. Institutional
C
97. Generally, a firm that ___________ is able to achieve competitive advantages for the longest time period because this type of innovation is novel and not easily duplicated at first. A. Architecturally innovates B. Focuses on costs C. Radically innovates D. Hyper-innovates
C
Generic business-level strategies that a firm can adopt include all of the following EXCEPT: A. Focused cost-leadership strategy. B. Focused differentiation strategy. C. Market differentiation strategy. D. Broad cost-leadership strategy.
C
In order for a firm to formulate an effective business-level strategy, it is important to remember that competitive advantage is determined by: A. The characteristics of the industry in which a firm competes. B. The characteristics of the firm itself. C. The characteristics of both the industry and the firm. D. The absolute positioning of the firm.
C
The ___________ is the difference between value creation and cost. A. Profit gap B. Net profit C. Value gap D. Revenue gap
C
The opening case of Chapter 6 highlights the business-level strategy of Whole Foods. All of the following are part of this strategy EXCEPT: A. Adopting a new strategic intent to become the champion of healthy eating. B. Reducing costs through initiatives such as expanding its private-label offerings. C. Emphasizing its organic food offerings as the tool to compete on price. D. Improving its logistics system in order to improve efficiencies.
C
16. Hollywood filmmakers used diversified inputs to gain international market access for their products by using: A. Foreign screenplays. B. Foreign locations. C. Foreign actors/actresses. D. All of the above.
D
19. Foreign direct investment (FDI) is a firm's investment in _________ abroad. A. Political funds B. Outsourcing C. Emerging economies D. Value chain activities
D
20. Which one of the following does NOT contribute to the rapid development of globalization? A. Falling trade barriers B. Advanced communication technology C. Reductions in transportation costs D. Increasing local tariffs
D
22. Innovation used as a sustained competitive weapon must be: A. Radical and low cost. B. Architectural and high cost. C. Short-term and efficient. D. Continuous and commercialized.
D
23. Which of the following is NOT an important aspect of innovation? A. Useful B. Novel C. Implemented D. Tangible
D
25. Which one of the following is NOT a reason firms expand abroad? A. To gain access to a larger market B. To gain access to low-cost input factors C. To develop new competencies D. To dominate domestic market
D
28. Combining the dimensions of a firm's __________ and __________ tells us which generic business strategy the firm will pursue. A. Economies of scope; economies of scale B. Five forces; economies of scope C. Scope of competition; core capabilities D. Strategic position; scope of competition
D
32. GM has been producing a small, boxy type of sedan in China, because of: A. Cultural differences B. The lower purchasing power of the Chinese market. C. Different customer demands. D. All of these
D
33. A(n) ____________ is the dominant design established during the growth stage of an industry life cycle once the market comes to agreement about the prevailing set of engineering features and design choices. A. Compliment B. Trial design C. Prototype D. Standard
D
33. Higher product value tends to go along with which of the following items? A. Higher prices B. A higher willingness to pay C. Higher costs D. All of these
D
34. Location economies are promoted by _____________ from foreign direct investments. A. High-quality labor B. A well-established infrastructure C. A complete supporting industry D. A community of learning
D
34. Which of the following is NOT an example of an industry standard or dominant design? A. Blu-ray media storage B. Barcode scanners C. Wintel operating systems D. The Dvorak (DSK) keyboard
D
35. Economic development has two consequences for MNEs. They are ______________. A. Rising wages and trustworthy relationships with suppliers B. High living standards and low crime rates C. Higher production rates and the development of green technology D. Rising wages and high living standards
D
39. OXO differentiates kitchen utensils by using a patent-protected, ergonomically designed rubber grip. By adding unique product features, OXO can: A. Turn differentiated products into standardized products with price parity. B. Turn differentiated products into standardized products with price disadvantages. C. Turn commodity products into differentiated products with price disadvantages. D. Turn commodity products into differentiated products with premium pricing.
D
39. ____________ refer(s) to the additional costs of doing business in an unfamiliar cultural and economic environment. A. International strategy B. National institutions C. National cultures D. Liabilities of foreignness
D
40. Google has benefited from being located in San Jose, California, which is considered a high-technology hub. This is because Google enjoyed _________. A. Low-cost labor B. Low-cost input factors C. Low tariffs D. Location economies
D
41. Strategy Highlight 6.1 discusses Toyota's recall challenges with its Lexus brand. All of the following are true EXCEPT: A. Toyota used the value driver of customer service when it called each owner individually for recommended repairs. B By exceeding customer expectations, Toyota turned a serious threat into an opportunity by establishing . brandreputationforsuperiorcustomerservice. C Toyota's customer responsiveness enabled the firm to influence early adopters who became opinion . leadersforinfluencingotherstopurchaseaLexus. DSince the Lexus recall of the 1990s, Toyota leveraged firm experience effects and has successfully . maintained quality leadership in the automobile industry with no major challenges.
D
42. The location advantages associated with locating facilities in other countries can include all of the following EXCEPT: A. Lower-cost inputs. B. Access to supplies. C. Access to markets. D. The evasion of host country regulations.
D
44. _______ refers to the political and legal factors of a foreign market. A. National culture B. Core competence C. Competitiveness D. National institutions
D
46. Terrorist attacks and the war in Iraq have: A. Encouraged MNEs to take advantage of reduced entry barriers in the Iraqi market. B. Reduced the "cost of doing business" by MNEs. C. Increased foreign direct investments in overseas markets. D. Increased the liability of foreignness for firms thinking of expanding.
D
50. Hofstede's national culture consists of all the following EXCEPT: A. Power distance. B. Individualism. C. Uncertainty-avoidance. D. Knowledge spillover.
D
51. In highly masculine cultures, general values are more toward each of the following EXCEPT: A. Competitiveness B. Assertiveness C. The exercise of power D. Cooperation
D
53. When competing on the basis of low-cost leadership, a primary objective is to: A. Lower manufacturing costs. B. Lower production costs. C. Lower supplier costs. D. Lower overall costs.
D
55. When costs per unit fall as output increases, _________________ occur. A. Economies of scope B. Diseconomies of scale C. Economies of efficiency D. Economies of scale
D
58. According to the globalization hypothesis, there seems to be some convergence of consumer preferences across the globe. However, national differences remain. This is due to ________________. A. Core competencies B. Location economies C. Regional clusters D. Distinct institutions and cultures
D
61. Learning curves were first used by aircraft manufacturers in the 1930s. Companies found a predictable relationship between increasing production output and cost per unit. What does it mean for a firm to have an 80% learning curve? A. Every time the cumulative output increases by 80%, the cost per unit will decrease by 20%. B. Every time the cumulative output is doubled, the cost per unit will decline by 80%. C. Every time the cumulative output goes up 20%, the cost per unit will decline by 80%. D. Every time the cumulative output is doubled, the cost per unit will decline by 20%.
D
64. Gillette introducing updated versions of its razor is an example of which type of innovation? A. Essential B. Disruptive C. Radical D. Incremental
D
64. The stage model of an international entry vehicle does NOT apply to ___________. A. Manufacturers B. Distribution/logistics firms C. R&D facilities D. Internet companies
D
65. Under the five forces model, a differentiation strategy works best when: A The firm has intangible resources, supplier cost increases can be passed on to the customer, and . equivalent substitutes are readily available. B The firm has tangible resources, supplier cost increases can be passed on to the customer, and . equivalent substitutes are readily available. C The firm has tangible resources, supplier cost increases can be passed on to the customer, and the . differentiationappealcreatescustomerloyalty. D The firm has intangible resources, supplier cost increases can be passed on to the customer, and the . differentiationappealcreatescustomerloyalty.
D
66. To maximize profitability, the best global strategy to use is _____________. A. The localization strategy of the firm B. The transnational strategy for the country C. The global standardization strategy for the SBU D. Dependent on products offered and strategic intent
D
68. When a firm is able to successfully employ an integration strategy, it will create a competitive advantage by: A. Combining high quality and product features to provide service that customers truly value. B. Using a first-mover advantage to be the lowest price in the market. C. Winning market share with a highly differentiated product. D. Beating rivals on product attributes while offering a better price.
D
70. There are two generic strategic positions that require managers to make trade-offs between, in order to achieve success at an integration strategy. They are: A. Service-oriented and low cost. B. Product-oriented and high cost. C. High cost and commodity. D. Low cost and differentiation.
D
70. Which of the following companies adopted an international strategy? A. Lenovo B. Nestlé C. Bridgestone D. Rolex
D
71. Transnational strategy is quite appealing, but it is difficult to implement due to _______. A. The high cost of input factors B. The diversified national culture C. The lack of national institutions D. Organizational complexities
D
74. Which of the following is NOT a factor pressuring companies for local responsiveness? A. Differences in employment laws B. Customization due to cultural differences C. Government pressure for firms to use local sources for procurement D. Availability of low labor costs
D
75. Firms within emerging economies may want to form strategic alliances with firms from developed countries because __________. A. Assets from the investing foreign company can be nationalized later B. Disruption to the host-country's economy will be minimal C. There will be less cultural conflict than in licensing arrangements D. It gains access to the foreign firm's sophisticated technology
D
76. Understanding how the "80-20" rule can be applied to the disruptive force of the Internet allows a firm to do all of the following EXCEPT: A. "Sell less of more" to customers with heterogeneous tastes. B. Target the remaining 20 percent of potential sales. C. Leverage the Internet to reduce transaction costs. D. Charge 20 percent more for online purchases.
D
76. _________ is when a firm is searching for new knowledge that could enhance future performance. A. Boundary spanning B. Channel communication C. Exploitation D. Exploration
D
77. Essentially, a successful integration strategy: A. Gives customers more perceived value while exceeding their price expectation. B. Allows a firm to make strategic trade-offs effectively. C. Enables a firm to increase value creation while keeping costs in check. D. All of these.
D
78. From Porter's National Competitive Advantage framework, ____________ describe(s) a country's endowments in terms of natural, human, and other resources. A. Demand conditions B. Competitive intensity C. Supporting industries D. Factor conditions
D
78. Under the "long tail" phenomenon, the short head represents: A. The smallest segment of the market. B. Where customer demand levels off. C. The maturity stage of the industry life cycle. D. The largest segment of the market.
D
81. Which of the following is most notably benefitting from the "long tail"? A. Walmart B. Disney C. Intel D. Netflix
D
84. According to Porter, the enduring competitive advantages in a global economy lie increasingly in local things, such as _________. A. Labor, resource, and location B. Investment, politics, and entry barriers C. Strategy, leadership, and dominant design D. Knowledge, relationship, and motivation
D
84. During the time of a(n) ____________, an existing industry is transformed due to revolutionary technology, becoming the new standard. A. Industry shift B. Market shift C. Innovative shift D. Paradigm shift
D
86. Silicon chip technology will eventually reach its physical limit and will not be able to be improved upon. As that day grows closer: A. Companies like Intel increase investments in R&D. B. Companies like Intel place "strategic bets" on emerging technologies. C. No new technology emerges as the best replacement until a paradigm shift occurs. D. All of these.
D
86. Understanding the productivity frontier is useful because of all of the following EXCEPT: A. It represents possible strategic positions a firm can take. B. It reflects the relationship between strategic positions, value creation, and costs. C. It helps a firm determine cost-differentiation trade-offs. D. It reflects which global markets will be the most productive to pursue in the future.
D
88. The ability of an existing firm to understand, evaluate, and integrate external technological developments is dependent on its: A. Own technology. B. Longevity in the industry. C. Strategic intent. D. Absorptive capacity.
D
93. Due to hypercompetition, a firm must engage in incremental innovation to remain competitive and gain advantage(s). However, the duration of these advantages: A. Are shorter in duration and magnitude with each subsequent innovation. B. Will eventually leave a firm vulnerable to radical innovations. C. Depend on when discontinuities occur in the industry. D. All of these.
D
A firm's strategic position is: A. Determined by its business-level strategy. B. Created through strategic trade-offs. C. An attempt to create a large gap between value creation and costs. D. All of these.
D