MGT499 Test 2

Not all firms are motivated by a need to grow.

True

Which of the following frameworks used to measure competitive advantage relies on both an internal and an external view of a firm?

The balanced-scorecard model

Which of the following stakeholders of a company would most likely be responsible for formulating a corporate strategy?

The chief executive officer

A firm's business strategy can lead to a competitive advantage if it allows the firm to

perform different activities than its rivals.

________ are the legal owners of public companies.

shareholders

The three financial ratios that constitute return on revenue are Cost of goods sold/Revenue, Research and Development expense/Revenue, and

Selling, general, and administrative expense/Revenue.

Which of the following is a feature of the growth stage of the industry life cycle?

The consumer demand increases.

Which of the following customer segments as described in the chasm framework make up the mass market?

The early and late majority together

Which of the following is an external performance metric?

Total return to shareholders

Unlike the financial ratios based on accounting data, total return to shareholders is

an external performance metric.

The translation of strategy into action primarily takes place in a firm's

business model

When a firm pursues a maintain strategy, it:

continues to support marketing efforts even if the demand for the product is declining.

Competitive advantage goes to the firm that achieves the

highest Cost of goods sold/Revenue ratio.

Which of the following sources of differential appeal is least effective in helping a firm sustain its advantage?

observable product features

________ are best described as the value of the best forgone alternative use of the resources employed.

opportunity costs

________ precisely indicates how much of a firm's sales is converted into profits.

return on revenue

The typical four-step innovation process begins with

the presentation of an idea as findings derived from basic research

What is an invention?

the transformation of an idea into a new product or process

The cost of capital to create a product is a fixed cost because it is

unaffected by consumer demand.

Process innovation typically overtakes product innovation in importance during the shakeout stage of the industry life cycle.

true

The most challenging diversification strategy is likely to be one that combines new core competencies with new and emerging markets.

true

In the why, what, who, and how of business models framework, the why dimension asks "why does the business model create value?"

True

Which of the following is primarily a value driver?

complements

The Tata Group, Warren Buffet's Berkshire Hathaway and the Japanese Yamaha group have several strategic business units under one corporate umbrella and are pursuing an unrelated diversification strategy. We would refer to these businesses as

differentiators

A(n) ________ leverages new technologies to attack existing markets.

disruptive innovation

The customers entering the market in the growth stage are primarily

early adopters

The concept of a(n) ________ attempts to capture both learning effects and process improvements at firms.

experience curve

A differentiator will always benefit when products have become commoditized.

false

PepsiCo operates in many countries and sells a wide variety of aerated drinks, other beverages, different types of chips, and Quaker Oats goods to achieve continuous growth. From this data, we can conclude that PepsiCo has been involved in

product-market diversification

The strategic objective of a first mover during the introduction stage of the industry life cycle is to

pursue a harvest strategy.

When executives of a firm consider business opportunities only where they can leverage their existing competencies and resources, it can be concluded that the firm is using

related-constrained diversification.

A defining characteristic of the pay-as-you-go business model is that the

users pay for only the services they consume.

The pursuit of both differentiation and low cost at the same time in a way that creates a leap in value for both the firm and consumers is called

value innovation

In the United States, the time period for the right to exclude others from the use of a patented technology is ________ from the filing date of a patent application.

20 years

Influence costs_____ are best described as costs that occur due to political maneuvering by managers to control capital and resource allocation and the resulting inefficiencies stemming from suboptimal allocation of scarce resources.

Influence costs

Which of the following is a disadvantage of the balanced-scorecard approach?

It provides limited guidance about which metrics to choose.

________ are best described as voluntary arrangements between firms that involve the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services to lead to competitive advantage.

Strategic alliances

Managers must first develop a strategy that is likely to produce a competitive advantage before implementing a balanced-scorecard approach.

True

_________ is best described as a firm's ownership of its production of needed inputs or of the channels by which it distributes its outputs.

Vertical integration

Firms that use taper integration also use ________ when they rely on outside-market firms for some of their supplies.

backward vertical integration

which of the following is a drawback of vertical integration?

it increases the potential of legal repercussions

The difference between the price charged for a product and the cost to manufacture it is referred to as the

producer surplus

A strategy of ________ will be most beneficial for a firm to enhance its overall corporate performance.

related-linked diversification

The balanced-scorecard can accommodate

short- and long-term performance metrics.

When a blue ocean strategy goes bad, a firm has neither a clear differentiation nor a clear cost-leadership profile. This situation is referred to as

stuck in the middle

The four-step innovation process ends with

Imitation

Each stage of the vertical value chain typically represents a distinct ________ in which a number of different firms are competing

Industry

Which of the following approaches to assess competitive advantage is based on the view that noneconomic factors can have a significant impact on a firm's financial performance?

the triple-bottom-line approach

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

vertical integration.

________ is best described as a measure of how effectively capital is being used by a firm to generate revenue.

working capital turnover