MGT 4335 Test 2

Which of the following is a condition where organizational elements fit together and reinforce each other? System Structure Strategy Alignment

Alignment

A strategy that mimics that moves of rivals is a ________ strategy. canvas tit-for-tat game dominant

tit-for-tat

A company's_______________, once identified, must either be reinforced or truly neutralized so they don't become targets of competitors. opportunities threats weaknesses strengths

weaknesses

Lucy, a researcher, wants to identify the main differences in different healthcare firms competing to deliver value. She studies the relative price, product line breadth, and geographic placement to identify the differences. Which of the following is Lucy likely to rely on to identify how the firms compete? An employee survey A quality control measure A workflow analysis A strategic group map

A strategic group map

What is the Pareto Principle? 20% of the effects come from 80% of the causes 60% of the effects come from 40% of the causes 80% of the effects come from 20% of the causes 50% of the effects come from 50% of the causes

80% of the effects come from 20% of the causes

Borpon Inc. and Biocolog Corp. are well-established biotechnology companies. They enter into a strategic alliance in which they create and own a legally independent company. The new company is created from resources and assets contributed by the parent firms. Revenues, expenses, and profits are equally shared by both firms. Which of the following strategic alliances is adopted by Borpon and Biocolog? A distribution agreement An equity alliance A joint venture A contractual alliance

A joint venture

Sepia Inc., a fertilizer company, needs permission to test its new products on plantations owned by an agro-based industry. In return, the company is willing to pay a percentage of revenue to the agro-based industry. In this case, which of the following contractual alliances should be adopted by Sepia? A. A licensing agreement B. A supply agreement C. A distribution agreement D. An input agreement

A licensing agreement

Marcel, the owner and president of a three-star hotel, believes that only competitors within the same strategic group need to be analyzed. Nina, the chief of client services, believes that other groups must also be considered in order to stay ahead of competition. Which of the following situations strengthens Nina's argument? A grocery store close to Marcel's hotel has all the ingredients required for her restaurant. The hotel owned by Marcel enjoys monopoly as it is located in a suburb with few similar service providers. The customers of Marcel's hotel are class conscious and do not prefer routine services available elsewhere. A new cafe on the same lane as Marcel's hotel is being frequented by business people.

A new cafe on the same lane as Marcel's hotel is being frequented by business people.

Crimson Corp., a painting unit, collaborates with a car manufacturing company. They sign a contract that specifies the tasks of each party in alliance. Which of the following is being exemplified in this scenario? A. A nonequity alliance B. An equity alliance C. A coordination alliance D. A vertical alliance

A nonequity alliance

Which of the following is involved with the execution portion of strategy implementation? Accountability for action Creating organizational alignment Clear Goals Accurate measures of performance All of the above

All of the above

Which of the following companies uses the strategy of "Eliminating a Step in the Value Chain"? Nordstrom Mercedes-Benz Amazon Wal-Mart

Amazon

Which of the following is not an example of a company that uses/has used the strategy of Low End Distruptive Innovation?

Amazon

Velara Inc., a healthcare company, owns 35% stake in the firm that supplies most of its raw materials. This encourages the supplier to align its incentives with Velara's needs. Which of the following is being exemplified in this case? A. A licensing agreement B. An equity alliance C. A distribution agreement D. A contractual alliance

An equity alliance

Inks Corp. is a manufacturer of pens. It creates a new product called Quink, a quick-drying ink pen that does not require the use of blotting paper. It creates this product by building on its established knowledge of the properties of ink and the mechanisms of a pen. Which of the following innovations is being exemplified in this case? A subversive innovation A radical innovation A revolutionary innovation An incremental innovation

An incremental innovation

Which of the following are ways a firm can take advantange of another firm in an alliance? Vertically integrating Misrepresentation Hold-up Both vertically integrating and hold-up Both misrepresentation and hold-up

Both misrepresentation and hold-up

Why should a company create a strategic alliance with one or more other companies? To differentiate more from competitors. To combine resources and capabilities to create new value. To make employees happy that may have connections with other companies. Both to differentiate more from competitors and to combine resources and capabilities to create new value. Both to combine resources and capabilities to create new value and to make employees happy that may have connections with other companies. All of the choices are correct.

Both to differentiate more from competitors and to combine resources and capabilities to create new value.

Which of the following is NOT a principle of competitive strategy? Bring threats against weaknesses Protect and neutralize vulnerabilities Know your strengths and weaknesses Develop strategies that cannot be easily imitated

Bring threats against weaknesses

How does Starbucks protect and neutralize its vulnerabilities? By opening more locations By increasing the price of its products By offering a variety of products, convenience, and brand recognition By lowering the price of its products

By offering a variety of products, convenience, and brand recognition

Jackson Inc., a manufacturer of high-end bikes, creates a new set of plans to improve the production rate. In the process, it realizes that it is not clear which new behaviors will work. Hence, Jackson decides to adopt a trial-and-error method to determine the best course of action. Which of the following phases of organizational change is exemplified in this case? Refreezing Unfreezing Hard triangle Changing

Changing

A strategy for "sustaining competitive advantage" includes ________. Introducing new products frequently Monitoring and mimicking rival behavior Implementing an exit strategy Create or preempt rare resources

Create or preempt rare resources

Deluxe Taxi is a local cab service. They built up a loyal following over many years. Lately Uber and Lyft have become popular and now the taxi service is seeing a decrease in business. Deluxe Taxi is in which stage of the product/business lifecycle? growth stage maturity stage decline stage introduction stage

Decline Stage

Which of the following is not one of the innovative strategies presented in the animation? Differentiation High-End Distribution Mass Customization Blue Ocean Strategy

Differentiation

Stars Corp. decides to eliminate activities associated with collecting and storing the products by directly distributing the finished goods to its customers. This enabled Stars to reduce the total cost. Which of the following is being exemplified in this case? Standardization High-end radical innovations Disintermediation Low-end distruptive innovations

Disintermediation

Which of the following is NOT one of the core principles of competitive strategy, as mentioned in the text? Protect and neutralize vulnerabilities Develop strategies not easily imitated Disrupt the market using innovation Know your strengths and weaknesses

Disrupt the market using innovation

__________ is when companies in the same industry find the innovation so unsettling that they can no longer do business as usual. Hypercompetition Incremental innovation Distruptive innovation Radical innovation

Disruptive innovation

What classification of strategy best describes the strategy deployed by Netflix to take on Blockbuster? Incremental Distruptive Differentiation Low End

Distruptive

________ is a grant of authority, formal or informal, that allows organizational members to try new practices. Empowerment The principle of line of sight A superordinate goal Guiding coalition

Empowerment

A contractual alliance involves writing a contract that describes how much equity each partner recieves. (T/F)?

False

Strategy implemetation depends only on the ability to execute. (T/F)?

False

To achieve economies of scale in a strategic alliance, two or more companies combine unique resources. (T/F)?

False

Determining the best way to respond to ____________ is often a company's most central concern. difficult employees upset customers competitive threats ups and downs of the economy

competitive threats

An air conditioner manufacturer, Hues Corp., decides to form a strategic alliance with a firm to source components that make up the highest percentage of total costs Which of the following suppliers is it most likely to choose as a partner? Fin Inc. which produces the compressors used in Hues Corp. air conditioners. Black Corp., which prints the Hues Corp. logo on the air conditioner. Den Corp., which produces the designer vents for Hues Corp. Jades Inc., which manufactures the packages required for Hues Corp.

Fin Inc. which produces the compressors used in Hues Corp. air conditioners.

Which of the following statements is true about how an arm's-length relationship is used in strategic alliance? Firms typically use the arm's-length relationship between internal departments. Firms that use the arm's-length relationship acquire the production facilities of other firms. Firms cannot buy inputs from multiple sources using the arm's length relationship. Firms use the arm's-length relationship to purchase inputs at the lowest price.

Firms use the arm's-length relationship to purchase inputs at the lowest price.

An organization has few rivals in the industry. These rivals are considering such moves as price changes, capacity adjustments, or new product features. Which of the following will help the organization predict the strategic actions most likely to be taken by its rivals? Strategic canvas Study of productivity Strutural analysis Game theory

Game theory

Which of the following is a structured approach to analysis of competitor interaction that yields predictions about which strategic actions are most likely to be chosen by rivals? Tit-for-tat strategy Dominant straregy Competitor response profile Game theory

Game theory

Walker and Harris are senior research fellows at a global non-profit organization. They are working on a project that studies the growth trend of a multinational corporation, Garcia Inc. When Walker and Harris decide to consolidate their study findings, Walker is of the opinion that Garcia is in the 'change process' phase, while Harris believes that the company is in the "refreeze" phase. Which of the following statements, if true, would strengthen Harris' belief? Garcia Inc. adopts a trial-and-error method to decide on the best growth strategy. Garcia Inc. formulizes and institutionalizes its new growth strategies. Garcia Inc. decides to adapt to its environment and learn new growth-inducing behaviors. Garcia Inc. publicly admits that the current situation is not working.

Garcia Inc. formulizes and institutionalizes its new growth strategies.

Which one of the following types of inputs or activities does NOT qualify as a "strategic" input that merits forming an alliance relationship? Inputs that can differentiate your product in the minds of customers High value inputs or activities that compromise a low percentage of your total costs Inputs or activities that require signifigant coordination in order to achieve that desired fit, quality, or performance Inputs that influence your brand or reputation

High value inputs or activities that compromise a low percentage of your total costs

Stylink Inc. and Plateus Inc. formed an alliance to create and own a legally independent company. However, Stylink tried to exploit the alliance-specific investments made by Plateus. Which of the following is being exemplified in this case? A. Hold-up B. Misrepresentation C. Bondage D. Battery

Hold-up

Which of the following is true about strategic alliances? Strategic alliance usually lead to one of the firms losing their relational advantage. Strategic alliance exclude functions that are bought through bidding. In strategic alliances, companies may choose to cooperate at any stage along the value chain. In strategic alliances, the power to make decisions is always evenly distributed amidst the firms.

In strategic alliances, companies may choose to cooperate at any stage along the value chain.

___________represents a set of moves in a game that simutaneously maximize each firm's payoff, given the choices of rivals and from which no player has an incentive to defect. Nash equilibrium Dominant strategy Game theory Competitor landscape

Nash equilibrium

Building on a firm's established knowledge base to create minor improvements to the product or service a firm offers is known as __________. Incremental innovation transformation outsourcing radical innovation

Incremental innovation

Which of the following is NOT one of the 4 broad areas of organizational performance that a Balanced Scorecard measures? Financial results Internal business processes Customer goals Interdivisional collaboration

Interdivisional collaboration

Which of the following statements is true of a firm that creates a radical innovation? It employs a fundamentally different business model than its rivals. It aims to sustain its current product offering and revenues. It focuses on the established knowledge base of a firm to deliver value. It relies on existing technologies and resources to create a new product.

It employs a fundamentally different business model than its rivals.

In the context of the 7S model of organizational alignment, which of the following statements is true of staffing? It helps create alignment between goals, skills, and environmental needs. It is the ability of an individual to perform tasks. It includes recruitment, hiring, training, promotion, and compenstation. It represents the most important S in the 7S model.

It includes recruitment, hiring, training, promotion, and compenstation.

Which of the following statements is true of shared values? It helps create alignment between goals, skills, and environmental needs. It refers to the priorities and virtues that members of an organization see as important. It includes recruitment, hiring, training, promotion, and compenstation. It represents the most important S in the 7S model.

It refers to the priorities and virtues that members of an organization see as important.

Which of the following is NOT part of the 3 Phases of Change? Unfreezing Changing Maintaining Refreezing

Maintaining

Which of the following represents the way rivals in a market interact and bargin for advantage? Dominant strategy Game theory Market structure Nash equilibrium

Market structure

Which stage of the product/business/industy life cycle involves an increase in competitive rivalry and late majority buyers? growth stage maturity stage decline stage introduction stage

Maturity stage

What is the challenge in the organization that measurement can help overcome? Members of the organization do not accept measurement tools. Members of the organization have perspectives that are limited to their domain/role. Members of the organization are in conflict. Members of the organization are resistant to strategic change.

Members of the organization have perspectives that are limited to their domain/role.

The research and development department of a pharmaceutical company is in the process of developing a new drug to cure Parkinson's disease. It requires additional resources to complete the process. To convince another pharmaceutical company to provide the necessary resources, it gives false information about how long the drug has been in the development pipeline and the guidelines followed in the prodution process. Which of the following is being exemplified in this case? Bondage Hold-up Misrepresentation Profit stealing

Misrepresentation

Which of the following is an example of "pooling similar resources" to create value in an alliance? A company and its supplier building a trustworthy relationship with fewer contracts. A supplier building a factory next door to its client to ease transactions. Oil companies creating joint ventures to share expertise and lower cost of exploration. A retail store teaming up with a designer to create a new line of clothing.

Oil companies creating joint ventures to share expertise and lower cost of exploration.

What is one reason that explains why the rate of failure of alliances is so high (50%)? The reputation of the partners is tainted by the external visibility of the alliance. One partner or another fails to mobilize internal resources to support the alliance inititave. Firms are burdened by the additional costs of a dedicated alliance function. This is incorrect; alliances are usually very successful.

One partner or another fails to mobilize internal resources to support the alliance inititave.

An organization forms an alliance contract. It specifies in detail the duties and obligations of each of the partners, how the profits are to be split by the partners, and the process by which disputes will be resolved. Which of the following clauses is likely to cover the duties and obligations of the partners, including warranties and minimum output levels required to satisfy the contract? Performance clause Voting rights clause Residual rights clause Dispute clause

Performance clause

Two firms that produce industrial machinery decide to form a strategic alliance. The objective of this collaboration is to combine their manufacturing facilities to achieve economies of scale during production. Which of the following is the primary value they aim to create through this alliance? Pooling similar resources Combining unique skills Creating product differentiation Lowering distribution costs

Pooling similar resources

Which of the following helps managers create measurement systems to overcome the limited perspectives of individual organizational members? Change processes Superordinate goals Balanced Scorecard Principle of Line of Sight

Prinicple of Line of Sight

_________ draws on a different knowledge base, technologies, or methods to deliver value in a truly unique way. Radical innovation Invention Incremental innovation Distributive innovation

Radical innovation

Copper Inc., an existing clothing outlet, decides to shift from direct to online retailing. It offers the same products at a reduced price as it does not have to incur the costs to manage a store. In this case, which of the following patterns of innovative strategies has Copper adopted? Reconfiguring the value chain to eliminate activities. Adding additional product features to increase the product life cycle. Forming product differentiation strategies to increase value. Creating low-end disruptive innovations to decrease competition.

Reconfiguring the value chain to eliminate activities.

Which of the following is not in the McKinsey 7S Model? Strategy Systems Shared Values Skills Situations

Situations

Which of the following terms represent a set of companies that compete in similar ways with similar business models pursuing similar sets of customers? Strategic group Market structure Competitor profile Game theory

Strategic group

Which of the following is correct? Strategy implementation is unimportant because it follows naturally from formulation. Strategy implementation is important because people need to feel good about the new strategy before they enact it. Strategy implementation is easy because organizational members see how a new strategy will lead to competitive advantage. Strategy implementation is difficult because it requires the organization to re-align its internal processes around the new strategy.

Strategy implementation is difficult because it requires the organization to re-align its internal processes around the new strategy.

Godwel Inc., an insurance company, wants to assign accountability for particular tasks. It wants to measure the performance of every unit of the company. Which of the following organizational elements will help Godwel accomplish the given task? Skill Strategy Structure Style

Structure

A_____________involves mechanisims, policies, or processes that coordinate and control the work of the different units of the organization. System Structure Strategy Style

System

Two organizations that are positioned at different stages along the value chain form an alliance. The contract includes the conditions under which the contract will be closed and the consequences of closure for each partner. Which of the following clauses specifies the above condition? Preemption rights clauses Termination clauses Noncompete clauses Voting rights clauses

Termination clauses

Which of the following is a tool that measures four broad areas of organizational performance: financial result, customer goals, internal business processes, and learning and growth? The Change processes The Soft Square The Balanced Scorecard Principle of Line of Sight

The Balanced Scorecard

A(n) _________________ is a profile of a competitor that identifies its objectives and assumptions, its strategy, and its resources and capabilities in order to anticipate how the competitor might respond to rival actions. competitor response profile strategy canvas strategic group map competition landscape

competitor response profile

Which of the following describes an approach, or pricing strategy, a company uses to get paid for the value it delivers through its business model? Innovative strategy The Revenue Model Blue ocean strategy Third-party pay strategy

The Revenue Model

Rafael, the chief executive officer of a chemical firm, believes that concentrating on the hard triangle of the 7 S model will help bring in the necessary organizational alignment in a relatively short period of time. Which of the following statements, if true, would strengthen Rafael's belief? The element of style and skills are often easy to codify and can speed up the process of change in an organizational structure. The organizational element of strategy is often difficult to codify. Changing the style or shared values of an organization is a less burdensome task for the top management. The elements of strategy, structure, and systems can help an organization to quickly reach the desired level of change within an organization.

The elements of strategy, structure, and systems can help an organization to quickly reach the desired level of change within an organization.

How does the 7S model guide strategy for the organization? The model helps the organization formulate an effective strategy to compete. The model helps the organization identify misalignments between elements and devise plans to realign them. The model helps the organization effectively lead strategic change. The model helps the organization identify stakeholders, those individuals and groups who affect, and are affected by, the firm and its activities.

The model helps the organization identify misalignments between elements and devise plans to realign them.

Which of the following statements is true about firms in a joint venture? The dependency level between partners is low. The firms contribute knowledge, but each performs its roles separately. The parent firms share revenues and expenses in a particular ratio. The contributions made by individual firms are easy to measure.

The parent firms share revenues and expenses in a particular ratio.

How do companies in different strategic groups differ from each other? The employ different business models. The go after customers with different value propositions. They are in completely different industries (e.g., automobile vs. medicine). The are in completely different industries and employ different business models. They employ different business models and go after customers with different value propostitions.

They employ different business models and go after customers with different value propostitions.

Toyota's seat supplier built its factory next door to Toyota's main factory and built a conveyor belt that transferred seats from the supplier into the Toyota factory. This is an example of _____________. combining unique resources. creating alliance specific resources. pooling similar resources. making the best out of their situation.

creating alliance specific resources.

Timber Inc. enters an exclusive partnership to ally with Teal Corp. in order to enter a foreign market. Which of the following statements is likely to be true in this case? Timber is likely to buy an acivity from Teal using an arm's-length relationship. Timber is likely to send a bid to Teal along with other suppliers for the lowest price. Timber and Teal are unlikely to recieve inputs or acivitiy from each other. Timber is likely to acquire an activity or input from Teal to create a new value.

Timber is likely to acquire an activity or input from Teal to create a new value.

Victor Corp., a high-end mobile manufacturer that targets business people, decides to increase its customer base. It forms a strategic alliance with Gray Inc. to produce new instruments designed to attract students. Gray helps design products that change how Victor is perceived by young customers. Which of the following is the primary objective of this strategic alliance? A. To source inputs or activities that create more productivity B. To source inputs or activities that influence the brand C. To source inputs or activities that reduce the total costs D. To source inputs or activities that increase productivity of existing products

To source inputs or activites that influence the brand.

Zara, a research analyst, is studying the business decisions of some restaurant owners. During the data analysis stage, she employs a strategic canvas. Which of the following is likely to be her primary reason to employ this tool? To identify the combined target audience of strategic groups as a whole To observe the similarities in the employees' views of their respective organizations To study the differences in the ways the restaurants compete with each other To understand the pricing strategy used for different dishes within each restaurant

To study the differences in the ways the restaurants compete with each other

Alignment means that parts are properly positioned in relationship to each other. (T/F)?

True

Companies that are in your industry but not in your strategic group are not your direct competitiors. (T/F)?

True

Switching from one strategic group to another is usually difficult. (T/F)?

True

The line of sight principle recognizes that grand strategies don't just happen, they come to fruition only as individual managers and employees make decisions about how to allocate the valuable resources they control. (T/F)?

True

The only true way to protect against misrepresentation is to partner with trustworthy individuals. (T/F)?

True

To institutionalize something is to make it so essential that it is taken for granted and becomes part of the central values of the culture. (T/F)?

True

__________entails moving away from certain actions, policies, or strategies before adopting anything new. Changing Unfreezing Refreezing Freezing

Unfreezing

Which of the following is one of the three criteria of an innovation presented in the animation? Useful Scalable Inimitable Distruptive

Useful

Zeal Inc., a software firm, decides to enter the publishing industry. While it has the financial resources required to enter the new market, it lacks the expertise and technical knowledge required to establish itself in the new industry. So, Zeal Inc. enters into strategic alliance with Chrome Corp., a leading e-publisher. Which of the following is likely to be true in this case? A. Chrome is likely to lose its relational advantage through this alliance. B. Zeal and Chrome are likely to cooperate even at the stage of research and development. C. Zeal's vision is likely to contradict that of Chrome. D. Chrome is likely to provide its expertise only at the marketing stage.

Zeal and Chrome are likely to cooperate even at the stage of research and development.

Any factor that increases the costs, lowers the profit margins, or limits the market share of entrants to a market is known as a(n)________. barrier to mobility game theory barrier to entry strategic structure

barrier to entry

Any factors that limit the ability of a company to move between strategic groups are called ___________. barriers to mobility game theories barriers to entry strategic barriers

barriers to mobility

Noel, the CEO of a firm operating in the electronics industry, wants to change the environmental trends, store keeping facilities, and distribution strategy by creating a new plan for the production plant immediately. This need for change can be achieved by _________. refreezing generating urgency creating a response profile building a guiding coalition

generating urgency

In the ______________ of the product/business/industry life cycle, sales begin to accelerate as innovation gains traction and increased market acceptance. growth stage maturity stage decline stage introduction stage

growth stage

In the ______________ of the product/business/industry life cycle, a company attempts to attract new types of buyers who are willing to try out the latest new gadgets. growth stage maturity stage decline stage introduction stage

introduction stage.

The __________ logic behind how the company is trying to deliver unique value to customers is defined as dominant logic. innovative primary secondary institutional

primary

A salon that specializes in haircuts comes up with a new service that sets it apart from those of its rivals. Clients are requested to send in their photographs; the stylists then create a set of digital images with various looks. Once the client chooses a desired look, a stylist goes to the client's home to deliver the service. The strategy of creating digital images, which requires a unique set of resources and skills, is an example of a(n) __________. altered innovation incremental innovation progressive innovation radical innovation

radical innovation

Drew's Cafe Inc. and Cuppa Corp., two local coffee chains, combine resources to enter the global market. They retain their individual ownership; however, they agree to share production facilities and manpower, and they also decide to market their products through combined promotional tools. The arrangement made by the two retail chains to combine resources and collaborate for a common objective refers to a _____. A. strategic alliance B. mass-customization strategy C. standardization venture D. product-differentiation strategy

strategic alliance

A _____________ provides a basis for making competitive assessments not only because it defines who a company's competitors are but also becasue it can help to analyze potential changes in the landscape. strategic group map competitor resoponse profile strategic canvas tit-for-tat strategy

strategic group map

A company's _______________ are the resources and capabilities that deliver unique value. opportunities threats weaknesses strengths

strengths

The soft square in the 7S model refers to elements that? are difficult for people to understand. take time to change. have little effect on a firm's strategy. are tangible elements managers can work on.

take time to change.

The hard triangle refers to? elements of alignment are difficult to articulate. skills and other difficult things to change. tangible elements of the 7S model that managers can easily work on. the partnership between managers, employees, and shareolders that allow strategic change to happen.

tangible elements of the 7S model that managers can easily work on.