MGMT 5560 Midterm 1 Quiz Questions

Which of the following will most likely be considered as an airlines core competency?

the airline's ability to make its fleet more fuel efficient than their competitors

The primary objective of Porter's five forces model is to

understand the profit potential of industries

Which of the following summarizes the difference between a firm's vision and mission?

A vision states what a firm wants to accomplish; a mission states how a firm plans to accomplish this vision.

Strategic commitments are actions that are

long-term oriented

When company managers formulate strategy decisions resulting from internal analysis, they are primarily making decisions about how to

obtain and allocate critical and scarce resources

ECO Jeans, Inc. had a mission to become the leading producer of environmentally friendly blue jeans, an emerging and in-demand category in the apparel industry. Its strategy involved leveraging a network of organic cotton farmers and suppliers of environmentally responsible synthetic materials to create a product that is durable, attractive, affordable, and 100% recyclable. However, because it did not upgrade its outdated production facilities, ECO Jeans could not assemble its products at a low-enough cost to offer the jeans at a price that was attractive to customers. ECO Jeans' strategy failed because

it was not backed up with strategic commitments

Janet wants to restructure the portfolio of all her firm's strategic business units. Janet will more than likely employ the ________ tool.

Boston Consulting Group (BCG) Matrix

There are many reasons why firms need to grow. Which of the following reasons is strongly influenced by economies of scale?

lowering costs

Firms that compete within the same strategic group generally experience

more competitive rivalry than firms outside their strategic group

In order to better achieve a competitive advantage, firms must now adopt a holistic approach towards satisfying multiple stakeholders opposed to focusing on the needs of their stockholders. This integrative approach is referred to as

stakeholder strategy

During an interview for a CEO position, Jennifer's potential employers ask her, "If you get this job, will you focus more on industry effects or firm effects?" What should her answer be?

"Firm effects. I will be able to have the most impact on those."

Mark owns Drones 'R' Us, Inc. and is looking for an alternative to vertical integration. He decides to manufacture some of his own parts while keeping a few key suppliers in his industry value chain as well. This is known as

taper integration

The goal of a strategic position is to create the largest gap possible between the __________ that a firm creates through its offerings and the _____________ required to create these offerings.

value; cost

Decisions relating to "what stages of the industry value chain to participate in" determine a firm's

vertical integration

John owns John's Trucking Corporation and is trying to determine if his firm should engage in vertical integration and diversify the range of services his business sells. Before John goes through with these decisions, he'll need to consider what is his

corporate level strategy

The first step to gain and sustain a competitive advantage is to

define a firm's vision, mission, and values

Maria and Tom both serve as SBU managers of their divisions. They have both been asked by the CEO to generate two different courses of action for a new product launch. This strategic decision-making technique can be described as

dialectic inquiry

Gr8t Food is a chain of "fast casual" restaurants that sells its menu items at higher prices than its competitors. The restaurant has a large customer base due to its wide product portfolio and superior customer service. Which of the following generic business strategies has Gr8t Food adopted in this scenario?

differentiation

Green and Good Inc., a multinational company, relies on its media partner OmniSignal to regularly advertise its offers, sales, and new products. OmniSignal is invested in this relationship because it generates most of its revenue from advertising Green and Good's products. In this scenario, OmniSignal is Green and Good Inc.'s

external stakeholder

The fact that both Whole Foods (a high-end grocery store) and Aldi (an inexpensive grocery sotre) have a compeittive advantage in the grocery store industry is an indication that

following a different generic business strategy within the same industry can lead to a competitive advantage for more than one organization

Which of the following terms describes the guiding policy to address the competitive challenge, and uses corporate and business level strategy?

formulation

According to the resource-based view of competitive advantage, if a firm's competitive advantage often stems from its

intangible resources

A firm's __________ relates to its ability to create value for customers (V) while containing the cost to do so (C)

strategic position

Which of the following best represents a customer-oriented vision statement?

"We provide solutions to professional communication needs."

Susan owns a firm that is considered fully integrated. Which of the following statements below would best describe a firm that is fully integrated?

All of Susan's business activities are conducted within the boundaries of the firm.

Tommy wants to open his own food truck but doesn't know anything about business. He needs help determining who his competition is, how he should craft his strategy to compete and how he'll implement his strategy to achieve a competitive advantage. He's hired you to help him get started. As a result, you know that you will probably use the

AFI strategy framework

Bigger & Better Inc. is a big box retailer who is in direct competition with Walmart and Target. Bigger & Better Inc. 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, Bigger & Better Inc. 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 Bigger & Better Inc. is currently less than Target and Walmart. It can be said that

Bigger & Better Inc. is "stuck in the middle" and has a competitive DISadvantage.

Organizational values help people make choices that are ethical and company-goal-oriented. These values answer which strategic management question?

How do we accomplish our goals in the organization?

Evaluate the following statement: Strategic leaders should always try to pursue a blue ocean strategy because it is the most complex, coveted, and most desirable strategy that exists.

I disagree; firms should only pursue this strategy if they are able to reconcile the tradeoffs of each generic strategy

All of the following are questions that managers should ask before crafting a business-level strategy except:

When should we introduce our product/service in the market?

Billy is the CEO of Billy's Kicks, a soccer ball retailer. He decides to purchase the synthetic rubber manufacturing firm so he can create his own soccer balls and sell them, nationally, in his retail stores. In order to do this, Billy will need to engage in ________, which is a corporate level strategy.

backward vertical integration

Bob is the strategic business unit (SBU) CEO in charge of manufacturing cufflinks for men's clothing. While the market he competes in is low growth, Bob's SBU's earnings and cash flow are both ranked at high and stable. When examining Bob's SBU through the Boston Consulting Group (BCG) matrix lens, we can conclude that his SBU would be classified as a

cash cow

The _________________ suggest(s) that because the external environment changes, strategic leaders must choose their current and future investments carefully over time in order to best maintain their firm's competitive advantage.

dynamic capabilities perspective

Food Shipp Inc. is a food supply company that wants to sell its products directly to consumers through mail order instead of going through supermarkets and other stores. However, supermarket chains want to make this transaction either illegal or more difficult for Food Shipp. To accomplish this, they are using ________to influence the political process.

lobbying forces

Amazon.com has decided to enter the college bookstore market. The goal of "Amazon Campus" is to offer co-branded university-specific web sites that offer textbooks and paraphernalia, such as logo sweaters and baseball hats. This development shows Amazon's relentless pursuit of

product diversification

Business managers are often concerned that just one of their company's activities will make or break their company's competitive advantage. However, you know that

their company success depends on an array of many key activities, not just one activity

Big Wheel, Inc. is a company that manufactures a variety of generators that run on wind power. The company envisions that wind technology will replace all forms of exhaustible energy sources in the near future. Which of the following statements will make an accurate vision for Big Wheel?

All nations around the globe should be able to provide energy produced by sustainable sources. Explanation: an effective vision talks about what an organization ultimately wants to accomplish it; it captures the company's aspiration.

Jill is interested in the concept of strategy and decides to create her own. As a result, Jill says that her strategy is to focus on growth and marketing to achieve competitive advantage. How would you evaluate Jill's statement?

Jill should reevaluate her statement because it fails to meet the principles of what a strategy should be

Andrew is a management consultant. Hard Supplies Inc. asks him to evaluate their company, and he finds that the difference between the cost of producing the firm's products and the value of those products is extremely narrow. What should Andrew suggest that Hard Supplies Inc. management do?

Find a way to widen the gap between cost and value.

Do vision statements help firms gain and sustain competitive advantage?

It depends, because the effectiveness of vision statements differ by type. Explanation: Customer-oriented vision statements allow companies to adapt to changing environments. Product-oriented vision statements often constrain this ability. This is because customer-oriented vision statements focus employees to think about how best to solve a problem for a consumer.

Deep Earth Gardening has a vision of helping every American learn how to grow their own food. Its management team recently unveiled the mission statement "A garden at every home." What is wrong with this mission statement?

It does not indicate how the company will accomplish its goals.

Mohawk is a leader in sustainable and innovative carpeting and floorings, as evidenced by its signature product, the world's first organic cotton carpet. Its product is unique and has appealing customer attributes. If Mohawk's raw material costs increased by 12 percent this year, what would be the likely outcome?

Mohawk would pass a major portion of this increase along as a price increase to its customers.

When conducting a ________, it's best to examine both PESTEL and Porter's five forces analyses because these tools focus on the external environment.

SWOT analysis

As the legal owners, ________ have the most legitimate claim on a company's profits.

Shareholders

When examining all the generic strategies, which of the following below is inherently superior in every industry?

There is no single superior business-level strategy

Which of the following tasks in the AFI strategy framework involves evaluating the internal and external environments in which a firm operates?

analysis

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

bargaining power of suppliers (things that ARE: economic, political, technological, etc. (PESTEL))

When a firm is able to successfully employ a blue ocean strategy, it will create a competitive advantage by

beating rivals on product attributes while offering a better price

In the five forces model developed by Michael Porter, ______________ is not defined narrowly as a firm's closest competitors but rather more broadly to include other factors in an industry like buyers, suppliers, potential new entry of other firms, and the threat of subsititutes

competition

Pete E' Gee sell's Big Dog Choppers, a special type of motorcycle. His business generates roughly 80 percent of his revenues from selling these motorcycles and about 20 percent on motorcycle repair and service. Pete E' Gee would be classified as a ________ firm.

dominant business

Marriott is able to create greater economic value than its competitors due to their ability to take advantage of ________, which describe the savings that come from producing two (or more) outputs at less cost than producing one output individually, while utilizing the same amount of resources and technology.

economies of scope Explanation: economies of scope are the savings that come from producing two (or more) outputs at less cost than producing each output individually

The first step in stakeholder impact analysis involves

identifying the stakeholders that currently have, or potentially can have, a material effect on a company

Suppose that several senior managers recently left Target Corporation and went to work at rival Walmart. What part of the "stocks and flows" of resources does this represent for Target Corporation?

leakage

Which of the following three important stakeholder attributes should managers pay special close attention to in order to better understand stakeholder impact analysis?

power, legitimacy, and urgency

Southwest Airlines (SWA) and Alaska Airlines both compete as point-to-point airlines, but they draw upon different resource bundles. This example best illustrates which of the following assumptions regarding the resource-based view?

resource heterogeneity

The process that describes the method by which managers conceive of and implement a strategy that can lead to a sustainable competitive advantage is called

strategic management

STRIKEBYTE Inc. is a software company that has built and acquired numerous assets over the years. According to the resource-based view of a firm, which of the following assets of STRIKEBYTE Inc. will best enable it to gain and sustain a competitive advantage?

the expertise acquired by the employees in the company

Bill is researching sociocultural factors related to his employer, a sporting goods manufacturer. Which of the following would be part of the sociocultural forces in a firm's external environment?

the family size of the firm's target market

A firm's strategic position is likely to be strong when

the gap between the value the firm's product generates and the cost to produce it is large

CarTsar Inc. is a manufacturer of automobile parts, which it sells to retail auto supply stores. Its core competencies include superior design and engineering capabilities, as well as a highly integrated and efficient supply chain. To sustain its competitive advantage, CarTsar should first

upgrade its engineering department and improve its supply chain