MGMT 464 Quizzes Ch 4, 5, & 6

A firm decides to retain $20,000 from its annual earnings and invest it in developing an advanced manufacturing system. In this scenario, the $20,000 would most likely be referred to as the firm's _____.

resource flow

A firm that follows the differentiation strategy is protected from the threat of new entrants primarily due to its:

reputation for quality.

The balance sheet of Embark Inc. shows that its total assets are worth $1,200,000. This includes inventories worth $120,000, patents valued $150,000, and goodwill estimated to be worth $70,000. The current liabilities of the company are estimated to be $275,000. In monetary value, the resource stock of Embark Inc. is worth _____.

$220,000

By selling a television at $1,200 for which consumers are willing to pay up to $1,300, a consumer electronics firm makes a profit of $500 per unit. What is the economic value created in this scenario?

$600

A firm's _____ are best described as distinct and fine-grained business processes such as order taking, physical delivery of products, or invoicing customers.

Activities

In the financial year 2012, Apple's return on revenue was 26.70% and BlackBerry's return on revenue was 6.30%. This implies that:

Apple's return on revenue was higher than that of BlackBerry.

_____ is best described as the difference between the value a consumer attaches to a good or service and what he or she paid for it.

Consumer Surplus

Rite Shoes competes against the global leaders in the athletic shoes industry by developing and selling acceptable quality shoes at a lower price. This has been possible due to the company's large-scale production that reduces its manufacturing expenses. Which of the following generic business strategies is Rite Shoes applying in this scenario?

Cost-leadership strategy

ChatRoom is an instant messaging mobile application, and it first introduced a trial version of the application for users that was not charged. However, after a period of six months, the users had to pay for a fee to use the upgraded version of the application with advanced features. Which of the following business models does this best illustrate?

Freemium

Hovizen Inc. and Opexo Inc are two competitors in the consumer electronics market. The cost incurred by each company to manufacture laptops is $400 per unit. Although both the companies sell their laptops at the same price, Hovizen has a larger market share in the laptop industry. What does this imply?

Hovizen has been able to offer more perceived value than Opexo.

Which of the following is NOT a disadvantage of the balanced scorecard approach?

It fails to allow managers to prepare the company for future growth.

Which of the following is a disadvantage of the balanced scorecard approach to measure firm performance?

It provides only limited guidance about which performance metrics to choose.

The payables turnover of Tesva Automobiles Inc. is 8.2 and that of its competitor, Mova Automobiles Inc., is 18.4. What does this financial data indicate?

Tesva Automobiles will be more efficient than Mova Automobiles in generating interest-free loans from suppliers.

Which of the following practices is most effective when pursuing an integration strategy?

Using teams in the production process

While Cadzia Electronics Inc. incurs $450 to manufacture a laptop, its competitor, Virtue Electronics Inc., incurs $400. However, laptops of both the companies have been able to create the same value among customers. From the given scenario, it can be inferred that:

Virtue Electronics and Cadzia Electronics. share a differentiation parity.

Which of the following statements accurately brings out the distinction between a firm's resources and capabilities?

While resources reinforce core competencies, capabilities allow managers to orchestrate their core competencies.

The tenet behind the triple bottom line is that:

a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy.

If a firm is not effectively organized to exploit the competitive potential of a valuable, rare, and costly to imitate (VRI) resource, the best case scenario is _____.

a temporary competitive advantage

In the context of the VRIO framework, a resource is said to be valuable if it:

allows a firm to take advantage of an external opportunity.

There are several cost drivers that can be managed in order to establish a low-cost leadership advantage. One of the primary cost drivers is:

combining experience based learning and process innovation to move onto a steeper learning curve.

Given its unique strategic position as an upscale grocer offering natural, organic, and luxury food items, Whole Foods enjoyed a competitive advantage during the economic boom through early 2008. However, the company's financial performance deteriorated during the recession of 2008-2009 as:

consumers became more budget conscious.

In a focused differentiation strategy, a firm seeks to:

deliver products or services with unique features to a specific, narrow part of the market.

Leather Love Inc. manufactures shoes. From procuring the leather to servicing the customer at the store, the cost incurred by the company per pair of shoes is estimated to be approximately $100. However, with each step in the value chain, the value of the product also increases. Thus, Leather Love can sell a pair of shoes costing $100 at $130. In this scenario, the difference between the value and the cost is best termed as the _____.

economic contribution

The sum of consumer surplus and producer surplus for a good or service equals the:

economic value created.

In the context of SWOT analysis, a firm can develop a defensive strategic option primarily by:

eliminating an internal weakness to mitigate an external threat.

Passion Coffee Inc. is a premium cafe that is reputed for its superior customer service. The coffee shop also serves gourmet food to its customers, which allows it to charge a premium price. Just Coffee Inc., in contrast, is a chain of coffee shops that charges the lowest price in the industry due to its self-service policy. However, Coffee Cult Inc. has found a balance between these two strategic groups by offering acceptable levels of customer service at a price slightly above that of Just Coffee. In this scenario, Coffee Cult is following a(n) _____.

integration strategy

For an apparel manufacturing unit, the cost incurred on fabrics, buttons, and zips is considered as variable cost primarily because it:

is dependent on the level of consumer demand.

Get Got.com was the market leader in the online retail industry for more than 5 years. The company's business model was its primary source of competitive advantage. However, competitors soon became aware of Get Got's unique business model through reverse engineering and benchmarking. A resource that was unique to the company eventually became a common resource. This change can best be attributed to _____.

knowledge diffusion

There exist important trade-offs between value creation and low cost because value creation and cost tend to be:

positively correlated.

Using the _____, managers can see how competitive advantage flows from a firm's distinct set of activities.

value chain analysis