STRAT Practice Exam 2

Which of the following is NOT a factor that can help a firm extend its competitive advantage?

Resource Stocks and Flows

_______________ are the firm's level of investments to maintain or build a resource.

Resource flows

_______________ refers to the idea that a firm is a bundle of resources and capabilities that is unique to the firm.

Resource heterogeneity

According to _______________ theory, a firm exists within an interconnected network of constituencies, both within and outside the organization, and the firm is responsible to these constituencies

Stakeholder

A firm trying to compete with the leading firm in a competitive industry can try to negate the leading firm's competitive advantage through _______________.

Substitution

Which of the following is a positive response to ecological factors in the PESTEL model?

Sustainable Economic Growth

What does the concept of resource heterogeneity imply

That each firm has different resources

What does the concept of resource immobility imply?

That it is difficult to reproduce the set of resources that a firm lacks in comparison to another firm.

According to the dynamic capabilities perspective, competitive advantage stems from a firm's ability to _______________.

agilely transform its resource base

Under the wholesale model, RETAILERS (not the wholesalers) sell goods for _______________

any price they want

"Time compression diseconomies" refers to the concept that _______________.

attempting to get a good outcome in less time tends to be ineffective

Time compression diseconomies occur when a firm _______________.

attempts to reach an outcome in a reduced amount of time

Deregulation of industries leads to intensified competition and higher value at lower prices for consumers. This is an example of _______________ factors influencing business.

legal

When managers understand the forces in the external environment, they are better able to _______________.

mitigate threats and leverage opportunities

Industry-specific factors known as _______________ separate one strategic group from another.

mobility barriers

One would expect low-cost grocery store such as Safeway and Piggly Wiggly to compete _______________ with each other than with higher-and grocery stores such as Whole Foods and Trader Joe's.

more intensely

In order to influence changes in their political environment, firms pursue _______________.

nonmarket strategies

Firms within the same strategic group tend to follow a(n) _______________ strategy while firms in a different strategic group follow a(n) _______________ strategy

similar; different

The interaction of the many individual systems in the operation of a company often leads to causal ambiguity because of _______________.

social complexity

A(n) _______________ is a set of companies within a specific industry that seek to achieve competitive advantage in similar ways.

strategic group

According to the five forces model, a firm seeking to compete in an established industry should seek to do which of the following?

Both position itself in a way that relaxes the constraints of strong forces and position itself in a way that leverages week forces

Which of the following is NOT a way in which the power of buyers affects producers?

By reducing economies of scale.

Cowgirl Boots, inexpensive leather boots for women, are selling at record-high numbers. The CEO of the company, however, cannot figure out why. Was it caused by the company's recent advertisement campaign or the newly reduced price of the boots or some other unknown factor? Based on this information, what concept describes the CEO's confusion regarding Cowgirl Boots' recent success?

Causal Ambiguity

_______________ has a greater chance of arising from intangible resources than from tangible resources.

Competitive advantage

Firms have a tendency to change the industry structure in their favor, for example by making industries more _______________ through mergers and acquisitions.

Consolidated

The firm's accounting profitability, ability to create shareholder value, and ability to generate economic value tend to be _______________.

Correlated

For a balanced scorecard to be effective, managers must do all of the following EXCEPT

Create a way to involve all employees in implementation of the balanced scorecard

In order to be successful, a firm must have a resource that is valuable, rare, costly to imitate, and the firm must _______________.

be organized to capture value

With a(n) _______________, firms describe how they turn strategy into action

business model

When a firm goes bankrupt, shareholders typically _______________.

cannot recover their risk capital

Dynamic capabilities are most relevant in _______________.

changing markets

Economic value created is the _______________ the cost to produce a product/service in the amount the buyer is willing to pay for it.

difference between

In the PESTEL model, political factors are those that relate to _______________.

government bodies

If the problem with a business strategy results in causal ambiguity, managers will _______________.

have a difficult time developing a theory to deal with the problem

Economic value creation is calculated as _______________.

the sum of consumer and producer surplus

The fact that tax preparation software such as Intuit's TurboTax is a valid alternative for professional services offered by H&R Block and others, is an example of _______________.

the threat of substitutes

The most a consumer is willing to pay for a product is equivalent to the product's _______________.

total perceived consumer benefits

Which of the following is NOT an example of a demographic factor?

Labor-Force Size

Which of the following have NOT helped increase the rate of convergence in the media industries?

New Kinds of Delivery Vans

Which of the following are NOT factors in a firm's legal environment?

Demographic Trends

Which of the following would be labeled variable costs by a computer manufacturer?

Hard Drives

At 3M one strategic objective that has been implemented is that 30% of revenues must be obtained from new product introductions. This is an objective that would arise as an answer to which of the following Balanced Scorecard questions?

How do we create value?

A balanced scorecard is a tool for strategy _______________.

Implementation

Which of the following dimensions is NOT included in the triple bottom line performance evaluation approach?

International

Which of the following statements is likely to be true about a fragmented industry

It consists of small firms

Primary activities in a generic value chain typically include which of the following?

Supply Chain Management

A resource is considered valuable and which of the following situations?

The resource helps the firm increase its economic value creation (V - C).

How are intangible resource stocks acquired?

Through investments over time in intangible resources.

Wholesaling is considered a(n) _______________ model for retail.

Traditional

The _______________ is a theoretical model that explains and predicts what resource attributes underpin competitive advantage

VRIO framework

Which of the following is NOT a characteristic of a monopolistically competitive industry?

Very few competing firms

Which of the following is NOT a key question for understanding the balanced scorecard?

What are the optimal prices of our products and services?

Which of the following industries does NOT use a subscription model

Zipcar-by-the-hour

According to Michael Porter, the profit potential of an industry is _______________.

a function of five forces related to competition

Walmart producing private-label brands such as Equate health and beauty items and Parent's choice baby products, is an example of _______________.

backward integration

Isolating mechanisms are considered to be _______________.

barriers to imitation