MNGT 428

Valuable; common

Currently, lean manufacturing is a _________ but _____________ resource which leads to competitive parity. • Valuable; rare • Common; tangible • Valuable; common • Rare; tangible

natural monopoly

Georgia Power and Philadelphia Gas Works are two examples of firms in what type of industry structure? • monopolistic competition • regulated monopoly • natural monopoly • oligopoly

Three suppliers merge together to gain economy of scale.

Given its size and industry influence, Walmart would be a powerful buyer. Which of the following is NOT an indication of Walmart's strength as a buyer? • Three suppliers merge together to gain economy of scale. • Suppliers locate very near Walmart's corporate headquarters. • Walmart switches from Rubbermaid to another vendor for containers. • Walmart decides to start manufacturing its own clothes to sell.

Creating a new strategic fit for IBM through the utilization of dynamic capabilities.

Strategy Highlight 4.2 discusses how IBM was able to rebound because CEO Lou Gerstner refocused the company on satisfying market needs through IT services as opposed to mainframe and mini-computers. This strategic highlight shows that IBM's current success is partially based on: • Creating a new strategic fit for IBM through the utilization of static capabilities. • Utilizing the resources of the mainframe hardware business. • Creating a new strategic fit for IBM through the utilization of dynamic capabilities. • The power of its brand equity.

A supplier

The United Auto Workers (UAW) union is which of the five forces in the automotive industry? • A supplier • A buyer • A complement • A substitute

all of these

The competitive threat of potential entry is NOT strong when _____________. • there will be expected competitive retaliation • there are sizable economies of scale • there are strong brand preferences and customers are loyal • all of these

core competencies

The general lesson from the Ch. 4 Opening Case on Circuit City is the importance of ______________ to a firm when it is attempting to gain and sustain competitive advantages. • tangible resources • core competencies • the economy • socio-cultural factors

The level of entry barriers is relevant to both existing and potential firms due to the competitive consequences for both

The level of entry barriers is only relevant to potential competitors because: • Firms that are established in an industry have already overcome the barriers to entry. • The existence of high entry barriers has little impact on overall industry profitability. • Competitive markets are dynamic, so established firms expect that there will always be new entrants. • The level of entry barriers is relevant to both existing and potential firms due to the competitive consequences for both

different

The profit potential for strategic groups within an industry is __________ between groups. • undetermined • different • similar • none of these

Value chain

The purpose of a firm's ___________ is to add additional value through primary and support activities that competitors cannot easily replicate. • VRIO network • Resource network • Value chain • Strategic chain

correct A "five star" industry

The soft drink industry has been one of the most profitable industries for years. There are two key competitors, Coke and Pepsi, who compete on product innovation and lifestyle advertising. Additionally, barriers to entry are high and supplier power is weak. Michael Porter calls this industry: • A positive-sum industry • correct A "five star" industry • A shining star industry • A complementary industry

All of these.

The worldwide car industry has had few new entrants in the past couple of decades due to very large entry barriers. How is BYD getting around these barriers? • In electric vehicles, the design is simpler than gas engines. • BYD started as a battery company and has strengths there. • BYD started by selling in emerging markets before developed ones. • All of these.

Complements

What is the sixth force of industry attractiveness? • Substitutes • Economic growth rates • Complements • Technological innovation

It increases.

When a buyer has a credible threat of backward integration, what happens to their power in the industry? • It decreases. • It increases. • It converges. • It has no impact.

A strategic activity system

When a firm is conceptualized as a network of socially complex, interconnected activities it is referred to as being: • A value oriented system • A strategic activity system • An adaptive organization • A firm with high resource utilization

non-price competition; be higher

When there is pressure to innovate, advertising is key and improved service is important for competition, competitors are engaging in ______________ and prices will ________. • price competition; be higher • perfect competition; be higher • non-price competition; be higher • perfect competition: be lower

Strengths and weaknesses

Which SWOT factors below are generated from internal resources, capabilities and competencies? • Opportunities and weaknesses • Strength and threats • Opportunities and threats • Strengths and weaknesses

Desktop computing

the firm is not organized to capture the value from its resources it will not profit from the investment in the resources. In the 1980's Xerox's Palo Alto Research Center (PARC) developed many of the foundations for the ___________ industry. Yet these valuable and rare innovations were commercialized by other firms. • Photo copying • Transportation • Desktop computing • Music

Not costly to imitate

1. Under the VRIO framework, Crocs Shoes was unable to sustain its competitive advantage because its resources were: • Valuable but out of date • Not costly to imitate • Too cheap • Non-substitutable

Near Monopoly

As natural monopolies are shrinking due to global governmental privatizations, another competitive landscape is emerging. Firms like Intel that have 80 percent market share in some markets would be called what? • Competitive monopoly • Regulated monopoly • Near Monopoly • Natural monopoly

resources

Assets that a firm can draw on that are both tangible and intangible are: • resources • capabilities • dependent • Immobile

Intangible

Competitive advantage occurs when there is a high utilization of which type of assets? • Tangible • Intangible • Heterogeneous • Homogeneous

More intense than competition between strategic groups

Competitive rivalry among firms in the same strategic group is generally: • More intense than competition between strategic groups. • Less intense than competition between strategic groups. • Similar in intensity than competition between strategic groups. • Fairly dependent on what industry the strategic group is in

Exit barriers are high

Competitive rivalry will get weaker when all of the following happen EXCEPT: • Demand is growing. • Exit barriers are high. • Products are differentiated. • One firm's actions will have little direct impact on a rival.

External value chain systems

In order for a firm's strategy to be effective, it must match all of the following EXCEPT: • Resource strengths and weaknesses • Market opportunities • External threats • External value chain systems

Generally higher industry profits.

Industry structures are not stable over time. The U.S. banking industry has seen major consolidation in recent years. We would expect the result of this dynamic change to be what? • Generally lower industry profits. • It will have no effect on profitability. • Further erosion in business. • Generally higher industry profits.

Managing value chain activities better than its rivals

One way that a firm can create a sustainable competitive advantage is by: • Managing value chain activities better than its rivals • Cutting value chain support activities • Reducing strategic activity systems relative to competitors • Keeping activity systems static

Apple's increased R&D spending that lead to the launch of iPod

Recessions are often viewed as a period of defensive position for firms. However, shrewd managers initiate strategic successes during downturns. What is an example of this provided in the text? • GM's foray into electric vehicles in California • Apple's increased R&D spending that lead to the launch of iPod • Intel's movement into European markets • UBS

Assets that are key to superior firm performance

Under the resource-based view of competitive advantage, firm resources such as intellectual knowledge and plant equipment are: • Assets that are key to superior firm performance. • Assets that may aid a firm but are not as important as the firm's strategic group. • Needed in order to achieve economies of scale. • Less important to competitive advantage than are resource immobility

They offer a credible threat of forward integration.

Suppliers are powerful when which of the following happens? • Satisfactory substitutes are available. • They sell a commodity. • They offer a credible threat of forward integration. • They are part of a highly fragmented industry.

Perfect Competition

The resource-based view is in sharp contrast to which model of industry competition (from Chapter 3). • Perfect Competition • Monopoly • Oligopoly • Monopolistic Competition

an oligopolistic industry

The type of industry most likely to engage in non-price competition is ___________. • a perfectly competitive industry • an oligopolistic industry • all industries engage in non-price competition • only strategic groups engage in non-price competition

Strategic equivalence

Amazon compensated for their lack of valuable and rare resources by implementing a new distribution system to reduce operating costs. This is referred to as: • Strategic ambivalence • Strategic activity system. • Strategic equivalence • Strategic immobility

Core competencies

Amazon is known for superior IT systems and customer service. UPS provides superior supply chain management services at low cost. Both Amazon and UPS have leveraged their _______________ which has led to competitive advantages for both firms. • Mobility resources • Core competencies • Economic equity • Core complements

• Resource differences between the firm and a rival are hard to replicate.

35. When a successful firm exhibits resource immobility, • It has difficulty redeploying resources to respond to strategic needs. • Resource differences between the firm and a rival are hard to replicate. • The likelihood of competitive advantage is lessened. • Resource differences between the firm and a rival are easy to replicate.

Rivals may employ substitution and work-around the original design.

A risk to a firm that believes that its resources are costly to imitate is: • Rivals may employ substitution and work-around the original design. • Due to the dynamic nature of competition, all resources eventually get imitated. • A firm's products or services are shielded behind social complexity. • Resources that are costly to imitate are based on casual ambiguity

Proprietary technology is a core capability.

Competitive intensity will increase when all of the following happen EXCEPT: • Proprietary technology is a core capability. • Rivals are similar in size and capability. • Buyers switching costs are low. • Exit barriers are high.

Resources, capabilities and activities.

Core competencies are built through the interplay of several firm attributes. These attributes include a firm's: • Resources, capabilities and activities. • Size, age and demographics. • Investments, industry and political climate. • All of these

Legal factors

Court decisions and regulations such as CARB zero-emissions are elements of which macro environmental force? • Political factors • Economic factors • Sociocultural factors • Legal factors

A firm's culture, knowledge and intellectual property take time to develop and are generally difficult to imitate.

Intangible assets add great value to a firm because: • A firm's reputation and brand equity are accumulated quickly and can be leveraged easily. • A firm's culture, knowledge and intellectual property take time to develop and are generally difficult to imitate. • Tangible assets require a high degree of capital; intangible assets do not. • All of these.

Casual ambiguity

It is difficult to pinpoint the underlying cause of Apple's phenomenal success. Gaining a deep understanding of exactly why Apple has done so well is difficult because of which situation? • Competitive dependence • Casual ambiguity • Strategic luck • Substitutability of Apple's competencies

A substitute

John Connelly went to the grocery store to buy some butter. As he was looking at the butter offerings, he noticed that Pam cooking spray was advertised as $1.00 less for the same amount of product. John purchased the spray. The spray is considered to be a what? • A complement • A mobility product • A replacement • A substitute

natural monopoly

A ____________ is created when the government believes the product or service would not be supplied by the market under free market conditions. • monopolistic competition • regulated monopoly • near monopoly • natural monopoly

Is stronger in monopolistic competition than in perfect competition.

A firm's pricing power: • Is stronger in perfect competition than in monopolistic competition. • Is stronger in monopolistic competition than in perfect competition. • Is weaker in a monopoly than in an oligopoly. • Is stronger in perfect competition than in a monopoly.

political, economic, legal, and technological

A firm's six PESTEL environmental force include ______________. • political, trade secrets, legal, and technological • product, environmental, political, and technological • political, economic, legal, and technological • environmental, product, ecological, and technological

Industry convergence

A process whereby formerly unrelated industries begin to satisfy the same customer need is often brought on by technological advances. What is this process called? • Strategic grouping • Competitive advantage • Industry convergence • Complementor analysis

The company is limited by inter-group mobility barriers based on economies of scale and brand loyalty.

A small-scale appliance manufacturer has been producing goods for a private label company for 25 years. This manufacturer has no brand image, a small production facility, and scarce capital resources. The company has made several strategic attempts to increase market share and create a nationally branded appliance market presence. So far, it has been unsuccessful. Why is this most likely so? • The appliance industry is not an attractive industry when it comes to existing firms. • The company is limited by inter-group mobility barriers based on economies of scale and brand loyalty. • five forces analysis reflects that the appliance industry is very attractive. • All of these.

Which activities should be done and more importantly what should not be done?

According to Michael Porter, when it comes to a firm's value chain activities and the essence of strategy a firm should ask itself: • Which activities should be done and more importantly what should not be done? • Where can costs be minimized to reflect the greatest profitability? • What tangible assets can be acquired to increase competitive advantage? • What are the best practices of the closest competitor and can they be easily adapted by the firm?

A firm is unable to create rare resources unless it is dynamic.

All of the following are true concerning the importance of dynamic capabilities to a firm EXCEPT: • A firm is unable to create rare resources unless it is dynamic. • The firm must be able to change its resource base and activity systems when the external environment changes. • The firm must be able to modify, upgrade and reconfigure its resources as needed. • Possessing dynamic resource capabilities helps the firm to sustain competitive advantage(s) over time

The macro environmental forces are similar between the airline and soft drink industries

Applying the five forces model to the airline and soft drink industries demonstrates all EXCEPT which of the following? • The soft drink industry has fairly low forces. • The airline industry has a high level of forces. • The profit level should be higher in the soft drink industry than the airline industry. • The macro environmental forces are similar between the airline and soft drink industries

Direct substitution with an engineering work-around

British conglomerate EMI developed and launched the invention of the CAT scanner. This paved the way for follow-up innovations like nuclear magnetic resonance imaging (MRI). Despite its initial success, EMI lost out quickly in the marketplace to GE Medical Systems. GE was able to reverse-engineer EMI's scanner. This is an example of what resource attribute? • EMI lost its social complexity • Direct substitution with an engineering work-around • This is undetermined due to causal ambiguity • Dynamic capabilities from EMI

Path dependence

Both Honda and Sony took many decades to build their core competencies and these competencies are based primarily by decisions made in the past. This process is called: • Path dependence • Dependence complexity • Causal dependence • Path immobility

Difficult to imitate

Strategic activity systems that are socially complex are: • Tangible resources • Difficult to imitate • Challenging to leverage • Customer oriented

Firms that possess these types of resources may be able to experience a sustained competitive advantage.

Creating resources that meet the VRIO criteria are strategically important to a firm because: • These resources can be easily deployed throughout the firm. • Firms that possess these types of resources may be able to experience a temporary competitive advantage. • It creates the heterogeneity essential for competitive parity. • Firms that possess these types of resources may be able to experience a sustained competitive advantage.

It decreases

Exit barriers are obstacles that determine how easily a firm can leave the industry. When exit barriers are high, what happens to industry attractiveness? • It decreases. • It increases. • It becomes a complement. • It has no impact.

They are intangible, costly to imitate and can lead to sustained competitive advantage(s).

Firm resources such as intellectual property and brand equity are important to a firm because: • Having such resources allows for a firm to achieve competitive parity. • Once created, maintaining such resources takes little managerial effort. • They are intangible, costly to imitate and can lead to sustained competitive advantage(s). • They are tangible and have a high degree of resource mobility.

VRIO resource.

The Strategy Highlight 4.1 points out that Nintendo became the market leader of game consoles and was able to gain market leadership over Sony and Microsoft based on its knowledge of the casual gamer. This deep understanding, derived over many years, has enabled Nintendo to develop games that respond to customer preferences. Nintendo's knowledge of its customer is currently a(n): • VRIO resource. • Valuable but common resource. • Easily substitutable resource. • Core competency that has provided competitive parity.

Path dependence can affect the ability to remain competitive.

The fact that the U.S. still uses a system of measurement from the 1820's instead of the metric system and is at a disadvantage in certain cross-border transactions and negotiations demonstrates that: • Mistakes made early on have a negligible effect on final outcomes. • Path dependence has limited influence on final outcomes • Time cannot be compressed at will • Path dependence can affect the ability to remain competitive.

All of these.

The factors that are important to focus on when mapping strategic groups include: • Identifying the top competitive factors in your market, such as expenditures on research and development, pricing, distribution channels, and customers. • Choosing two key dimensions from these factors for the horizontal and vertical axes, plotting your rivals along these axes, and looking for differences among the competition. • Analyzing the firms that are closest to your organization on the map, because they will give your firm the strongest rivalry. • All of these.

Assess the potential for profits within an industry.

The objective of Porter's five forces model is to: • Assess firm profitability. • Assess the potential for profits within an industry. • Emphasize the intensity of rivalry within an industry. • Analyze the economic conditions of the industry.

Identify how competitive advantage flows from the inputs to outputs of the firm's distinct activities.

Under the value chain perspective, managers evaluate a firm's system of activities in order to: • Identify how competitive advantage flows from the inputs to outputs of the firm's distinct activities. • Determine how much value the firm has in the minds of shareholders. • Ensure that support activities add direct value to the firm. • Strategize whether it would be a competitive strength to integrate backward or forward.

Core competency

Unique strengths that are embedded deep within a firm that allow a firm to differentiate itself and create higher value for customers is a: • Competitive advantage • Core competency • Resource competency • Value chain

Compounding effect reducing of the probability of success copying each interconnected system activity

What pitfall does the use of strategic activity systems highlight when a competitor is considering imitating a rival firm? • Copyright infringement against copying the firm's processes • Compounding effect reducing of the probability of success copying each interconnected system activity • Path dependence of the core activities of the firm • Loss of competitive advantage due to reduction of VRIO

• Resource differences between the firm and a rival are hard to replicate.

When a successful firm exhibits resource immobility, • It has difficulty redeploying resources to respond to strategic needs. • Resource differences between the firm and a rival are hard to replicate. • The likelihood of competitive advantage is lessened. • Resource differences between the firm and a rival are easy to replicate.

It increases.

When a supplier has a credible threat of forward integration, what happens to their power in the industry? • It decreases. • It has no impact. • It converges. • It increases.

Competitive parity

When firm has resources and capabilities that are valuable and rare only, then it has: • Competitive ambiguity • Competitive parity • Sustained competitive advantage • By definition, temporary competitive advantage

The profit potential is weak.

When the collective strength of the five forces works against an industry: • Individual firms should compete on price. • Individual firms should move from one strategic group to another. • The profit potential is weak. • There is a high degree of profit potential.

Strategic activity system

Which framework below is most effective at demonstrating the difficulty of imitating a firm with 25 interconnected activities? • Strategic activity system • VRIO framework • Value chain analysis • SWOT analysis

The VRIO framework.

Which framework can managers use to determine whether firm resources and capabilities are internal strengths or weaknesses? • The VRIO framework. • The PESTEL analysis • The five forces model • Support activities

BYD is the only car company focused on electric cars.

Which of the following is NOT a benefit about the background of BYD that may help it be successful in overcoming barriers to enter the electric vehicle market? • BYD has a large and successful home market. • BYD is the only car company focused on electric cars. • BYD is accustomed to selling competitive products to multinational firms. • BYD started as a battery firm and has key insights to this technology.

A strategic group

Which of the following is NOT a main industry group in the SCP model? • Monopolistic competition • An oligopoly • Perfect competition • A strategic group

Complements

Which of the following is NOT one of Porter's five forces? • Substitutes • Suppliers • Complements • Buyers

All of these

Which of the following is true when it comes to a firm's capabilities: • They are the organizational and managerial skills within a firm. • They are found in the firm's structure, routines and processes. • They are used to deploy a firm's resources to orchestrate core competencies. • All of these

They are reliant on the industry's product.

Which of the following would NOT indicate that buyers are a strong competitive force? • They can integrate backward. • They can purchase from several sellers. • They are reliant on the industry's product. • They buy in large quantities.

Substitutes exist for their components.

Which of the following would NOT indicate that sellers are a strong competitive force? • Substitutes exist for their components. • They can supply the component for a cheaper cost than industry makers can produce it. • The buyers of their component are not important customers. • The component that they supply affects buyer product quality

Oligopoly

Which of the main industry groups in the SCP model is described as having a few large firms, differentiated products, and high entry barriers? • Monopolistic competition • Oligopoly • Monopoly • Perfect competition

Monopolistic competition

Which of the main industry groups in the SCP model is described as having many firms, some pricing power, and differentiated products? • Monopolistic competition • Oligopoly • Monopoly • Perfect competition

bundles of resources and capabilities differ across firms

Within the resource-based model, what is the meaning of the term "resource heterogeneity"? • bundles of resources and capabilities are fundamentally the same across firms within the same industry. • bundles of resources and capabilities differ across firms • resources don't move easily from firm to firm • resources move easily from firm to firm

Resource heterogeneity

_________ implies that for a given business activity, some firms may be more skilled than others in accomplishing it. • Resource homogeneity • Resource mobility • Resource heterogeneity • Resource immobility

All of these

_______________ assesses whether a good business opportunity exists or not. • A structure-conduct-performance (SCP) analysis • A five forces industry environmental analysis • A PESTEL model analysis • All of these