Strategic Management Final

Of the following components of the external environment, which is the most likely to affect all firms, irregardless of their specific industry? Legal/regulatory Political Economic External Internal

Economic

Which of the following is NOT one of the keys to success when pursuing an unrelated diversification strategy? Pursue industries and business units with growth potential Invest resources into being a strong corporate parent Ensure that the value chains of the acquired businesses create economies of scope Don't overpay for acquired companies All of the above are actually important for an unrelated diversification strategy

Ensure that the value chains of the acquired businesses create economies of scope

The ideal conditions for a niche strategy are when the target market is constrained and growth opportunities limited. True False

False

Which of the following is an example of both financial and strategic objectives? 1) Pass MGMT 4842, and 2) Fail to fail MGMT 4842 1) Increase revenues from $72 billion in 2012 to more than $130 billion in 2016, and 2) derive 10% of revenues from sales of new products introduced within the past ten years 1) Increase operating profit from 48% in 2010 to 57% in 2015, and 2) maintain appropriate financial flexibility with ready access to global capital and credit markets at favorable interest rates 1) Increase business-to-consumer deliveries from 46% of domestic deliveries in 2014 to 51% in 2019, and 2) Increase intraregional exports from 66% of exports in 2014 to 70% by 2019

1) Increase revenues from $72 billion in 2012 to more than $130 billion in 2016, and 2) derive 10% of revenues from sales of new products introduced within the past ten years

PeeDee's Burger Shack has several fast food outlets in the Eastern North Carolina region. Recently, the company has rolled out a new technology platform featuring call-ahead ordering from their smartphone app, and kiosks for easy ordering in stores. Rameses' Adequate Eats, the chief competitive rival of PeeDee's Burger Shack, does not have these technological capabilities and is watching nervously as PeeDee's Burger Shack increases its market share. Given the information above, from the point of view of PeeDee's Burger Shack, the deployment of this new technological platform is best categorized in a SWOT analysis as: A Strength A Weakness An Opportunity A Threat A Weakness/Opportunity

A Strength

PeeDee's Burger Shack has several fast food outlets in the Eastern North Carolina region. Recently, the company has rolled out a new technology platform featuring call-ahead ordering from their smartphone app, and kiosks for easy ordering in stores. Rameses' Adequate Eats, the chief competitive rival of PeeDee's Burger Shack, does not have these technological capabilities and is watching nervously as PeeDee's Burger Shack increases its market share. Given the information above, from the point of view of Rameses's Adequate Eats, the new technology rollout from PeeDee's Burger Shack is best categorized in a SWOT analysis as: A Strength A Weakness An Opportunity A Threat A SWOT

A Threat

In our discussion of ethics and CSR, we described the firm as an "open system." Which of the following best describes an open system as we defined it? A business depends upon inputs from outsiders to create its products/services, and outside downstream partners to purchase its products/services A firm that uses open source IT systems is open for stakeholders to learn from and contribute to Organizations are democratic in that all owners (i.e., shareholders) have a say in firm governance Systematically, firms openly describe CSR and ethics

A business depends upon inputs from outsiders to create its products/services, and outside downstream partners to purchase its products/services

The difference between a core competence and a distinctive competence is best described by which of the following statements: A core competence is central to a firm's ability to survive in a given industry, while a distinctive competence is something the firm does substantially better than rivals and that provides the foundation for a competitive advantage A core competence is something a firm does within the heart (i.e., core) of its operations, while a distinctive competence is something it does just to be different A core competence is a weakness, whereas a distinctive competence is a strength None of the above statements adequately desecribe the difference

A core competence is central to a firm's ability to survive in a given industry, while a distinctive competence is something the firm does substantially better than rivals and that provides the foundation for a competitive advantage

The main advantage of capitalizing on economies of scale for a low-cost provider is: Achieving lower per-unit costs by increasing the scale of production Increasing fixed costs Adding scale features that are desired by consumers capitalizing on economies of scope

Achieving lower per-unit costs by increasing the scale of production

Which of the following is NOT a potentially important factor for companies pursuing a related diversification strategy? The ability to share resources between and among business units The opportunity to combine activities in the value chains of different business units Possession of strategic assets that can be applied to and enhance the value chain performance of other business units The ability to port a recognizable and reputable brand name into a new product-market or segment All of the above are actually good indicators for pursuing related diversification

All of the above are actually good indicators for pursuing related diversification

Which of the following statements is FALSE with regards to backward integration? It limits supplier power over the firm It can allow the firm to acquire and/or protect proprietary knowledge Backward integration may lower firm costs Backward integration introduces additional complexity that renders the firm less flexible, thus increasing risk All of the above statements are, in fact, true with regards to backward integration

All of the above statements are, in fact, true with regards to backward integration

Which of the following statements regarding ethics and CSR is true? They are not different concepts; CSR is essentially applied ethics. Poor performance in either category tends to have negative financial repercussions for companies. Ethics is a moral philosophy, while CSR entails balancing financial performance alongside "doing the right" thing with respect to key stakeholder groups. All of the above statements are, in fact, true.

All of the above statements are, in fact, true.

Which of the following tests would you employ to determine if a company's strategy is effective? A. The Fit Test B. The Competitive Advantage Test C. The Performance Test D. All of these are useful ways of evaluating a firm's strategy

All of these are useful ways of evaluating a firm's strategy

Which of the following is true of competitive advantage (CA) and sustainable competitive advantage (SCA)? A. CA will eventually be overcome by competitors; SCA is extremely difficult for competitors to overcome B. SCA gives customers long-run reasons to prefer the products of services of a company over its competitors Turning CA into SCA typically involves leveraging competitively valuable expertise and/or organizational capabilities that cannot be easily imitated by rivals It often takes a long time to turn CA into SCA All of these statements are true, obvs.

All of these statements are true, obvs.

Which of the following is NOT one of the four routes to achieving a competitive advantage through differentiation? Appealing to buyers who are sophisticated and shop hard for the best, most unique attributes Adding tangible features that increase customer satisfaction Adding features that lower the buyer's overall costs of using the product Adding intangible features that increase customer satisfaction

Appealing to buyers who are sophisticated and shop hard for the best, most unique attributes

The difference between the preconventional and conventional stages of moral development is best described by which of the following statements? At the preconventional stage, individuals do what they perceive as right based on their their own personal preconventions, while at the conventional stage individuals will only do what is right when conventional wisdom informs them to do so The difference is defined by whether a firm engages in CSR before an issues arises (i.e., preconventionally) or after it has arisen (i.e., conventionally) The difference is defined by whether an individual engages in CSR before an issues arises (i.e., preconventionally) or after it has arisen (i.e., conventionally) At the preconventional stage, individuals only do what is right as a means of avoiding negative consequences, wheres at the conventional stage, individuals do what is right to avoid disappointing their social group

At the preconventional stage, individuals only do what is right as a means of avoiding negative consequences, wheres at the conventional stage, individuals do what is right to avoid disappointing their social group

Which of the following best describe the two main roads for achieving competitive advantage? A. Beating competitors through innovation or beating competitors through higher perceived value B. Beating competitors through innovation or beating competitors through lower costs C. Beating competitors through synergies or beating competitors through lower costs D. Beating competitors through synergies or beating competitors through innovation E. Beating competitors through lower costs or beating competitors through higher perceived value

Beating competitors through lower costs or beating competitors through higher perceived value

Which of the following companies is using cost drivers to perform value chain activities more cost-efficiently? a. Bill's Baseball Bat Company uses just-in-time inventories for aluminum, wood, and shaping supplies b. Greg's Glove Factory stockpiles large amounts of leather to avoid delays in production c. Jim's Jerseys looks to substitute its inputs with higher quality materials whenever and wherever possible d. All of the answer choices are examples of focusing on cost drivers to perform value chain activities more efficiently

Bill's Baseball Bat Company uses just-in-time inventories for aluminum, wood, and shaping supplies

Paul the Lumberjack has been felling trees and producing timber since he was big enough to wield an axe. He loves his work and has never cared that many other people also run logging businesses. In fact, he's pretty friendly with a lot of them and they go out for pancakes together regularly. Recent years have seen a consolidation of the buyer market for lumber, with most lumber sales now going just to the Home Depot, Lowes, and 84 Lumber. More concerning, though, is the fact that steel studs and beams have significantly dropped in price and are increasingly used in place of 2x4's and wooden beams. In this example, bargaining power is highest for: Suppliers Buyers Substitutes Pancakes

Buyers

Which of the following statements is true regarding the difference between corporate-level strategy and business-level strategy? Assume that corporate strategy in this case is not a single-business focused strategy. Business strategy is concerned with supporting functional area strategy, while corporate strategy is focused on effective governance by the board of directors Business strategy is concerned managing a portfolio of firms, while corporate strategy is focused on effective governance by the board of directors Corporate strategy is concerned with gaining synergies from a portfolio of businesses, while business strategy is concerned with increasing market position and gaining competitive advantage The essence of corporate strategy is achieving competitive advantage, while the essence of business strategy is integrating the corporate strategy into functional areas

Corporate strategy is concerned with gaining synergies from a portfolio of businesses, while business strategy is concerned with increasing market position and gaining competitive advantage

Which of the following statements is true regarding the difference between corporate-level strategy and business-level strategy? Assume that corporate strategy in this case is not a single-business focused strategy. Corporate strategy is concerned with gaining synergies from a portfolio of businesses, while business strategy is concerned with increasing market position and gaining competitive advantage Business strategy is concerned managing a portfolio of firms, while corporate strategy is focused on effective governance by the board of directors The essence of corporate strategy is achieving competitive advantage, while the essence of business strategy is integrating the corporate strategy into functional areas Business strategy is concerned with supporting functional area strategy, while corporate strategy is focused on effective governance by the board of directors

Corporate strategy is concerned with gaining synergies from a portfolio of businesses, while business strategy is concerned with increasing market position and gaining competitive advantage

Which of the following examples is NOT a good example of product substitution? Drinking a Mountain Lightening instead of a Mountain Dew Having a chef's salad instead of a burger and fries for lunch Renting a snowboard instead of skis Using a cell phone for all calls instead of having a landline Subscriging to Hulu Live TV streaming instead of using a Cable TV provider

Drinking a Mountain Lightening instead of a Mountain Dew

Which of the following is NOT one of the dangers of unrelated diversification? The absence of strategic fit among unrelated businesses either limits or eliminates opportunities for generating new competitive advantages Firm risk is spread out over multiple industries There is always the risk that management is pursuing unrelated diversification for personal achievement or self-aggrandizement, not because it is in the best interest of shareholders Managing unrelated businesses presents management challenges that can often be overcome in normal business conditions by "managing by the numbers," but conditions of volatility make it extremely difficult for the managing parent to oversee and steer numerous business units

Firm risk is spread out over multiple industries

ll of the following are advantages of adopting a broad differentiation strategy EXCEPT: Expand market share by attracting new customers to differentiated attributes Retain customers through increased loyalty Focusing on a narrow segment of consumers Being able to charge a higher price for goods/services

Focusing on a narrow segment of consumers

Steve the Pirate runs a company that makes and wholesales hot dogs. Hot dog production is a mature industry, becoming an established part of the American food market during the growth of the meat packing industry in Chicago and other midwestern cities in the late nineteenth century. In fact, Steve the Pirate's family has been producing hot dogs since his great-great-grandfather led a mutiny to transition his company from looting and pillaging to legitimate importing and exporting. In fact, many hot dog producers have long and storied histories dating back over a hundred years, and most are roughly equal these days in their ability to produce hot dogs. Unfortunately, the highly-seasonal nature of the hot dog industry means that producers are required to maintain large investments in storage and warehousing to accommodate large inventory stores. Steve the Pirate feels the weight of his family's history in this market, though, and is deeply, personally committed to overcoming his competitors, even though hot dogs are nearly interchangeable among brands. Given this information, the intesnity of rivalry in this industry is most likely: High Low Equal Buff

High

Which of the following statements best describes the notion of causal ambiguity? It is a substitute product that is hard to differentiate (i.e., ambiguous) from another company's products It speaks to synergies of the business plan that focus on sustaining high profitability It addresses the difficulty other firms experience in understanding how a given complex resource and its deployment enhance another firm's competitive advantage, making it difficult to imitate All of the above statements are true regarding causal ambiguity

It addresses the difficulty other firms experience in understanding how a given complex resource and its deployment enhance another firm's competitive advantage, making it difficult to imitate

Which of the following is a disadvantage of the multidomestic strategy? It requires delegating decision making to local employees It fosters greater responsiveness to local demand It's harder to respond to local needs under a multi-domestic strategy It is hard to transfer capabilities/resources across different products

It is hard to transfer capabilities/resources across different products

"We define a compelling, sustainable future and create the path to achieve it." Above is the vision statement of the Heinz corporation. Why is this an ineffective vision statement? a. It is too future-focused, lacking an emphasis on "who we are" and "what we do" b. It is not graphic; it's too vague on where the company is going and how it intends to prepare for the future c. It is too flexible. A vision statement should lock a company into a specific path to avoid market changes or changes in customer tastes d. Only answer choices a and b address why this is a weak vision statement e. Answer choices a, b, and c all address weaknesses of this vision statement

It is not graphic; it's too vague on where the company is going and how it intends to prepare for the future

Which of the following statements is true regarding the profit formula? It's a means of determining how likely a firm is to remain as a going concern in the eyes of customers It's the formula used to determine the profit level deemed acceptable to shareholders It's the formula for determining how much a customer is worth All of the above statements are true It's the formula used to determine if the firm's cost structure will allow it to fulfill its value proposition while generating an acceptable profit margin

It's the formula used to determine if the firm's cost structure will allow it to fulfill its value proposition while generating an acceptable profit margin

Which of the following statements is true of the customer value proposition? A. It's the way in which a company plans to effectively meet buyer demands B. It's the formula for determining how much revenue a firm can extract from its consumers C. It's the formula for determining how much it will cost to provide value to customers D. It's a useful tool for determining if the company can be financial stable as a going concern E. All of these statements are true regarding the customer value proposition

It's the way in which a company plans to effectively meet buyer demands

Organizational Capabilties tend to be: Knowledge-based and retained in the company's human and intellectual capital, and tacit knowledge systems Deployed only when an organization is under threat from rivals Tangible and readily quantified via financial ratio analysis Capably organized within the organization but outside of the KSAOs of the labor force within the industry

Knowledge-based and retained in the company's human and intellectual capital, and tacit knowledge systems

Tiger Tenniswear is one of the best-known brands of tennis apparel on the market, and sponsors a number of very high profile international tennis stars. Recent marketing surveys by the ATP suggest that it is one of the most globally-recognized tennis brands. However, Tiger Tenniswear currently only produces and sells its products in the United States the UK. The company would like begin expanding into continental Europe, but part of its competitive advantage is keeping production close to its retail markets. Currently, Tiger Tenniswear is in discussions with a French company, Le Coq Sportif, that acquires fabrics and manufactures apparel. If the discussions come to fruition, Le Coq Sportif will acquire the rights to manufacture and distribute apparel with the Tiger logo in the French, German, and Spanish markets it currently serves. Based on this information, which internationalization tactic is Tiger Tenniswear discussing with Le Coq Sportif? Licensing Exporting Franchising Joint Venture

Licensing

Tiger Tenniswear is one of the best-known brands of tennis apparel on the market, and sponsors a number of very high profile international tennis stars. Recent marketing surveys by the ATP suggest that it is one of the most globally-recognized tennis brands. However, Tiger Tenniswear currently only produces and sells its products in the United States the UK. The company would like begin expanding into continental Europe, but part of its competitive advantage is keeping production close to its retail markets. Currently, Tiger Tenniswear is in discussions with a French company, Le Coq Sportif, that acquires fabrics and manufactures apparel. If the discussions come to fruition, Le Coq Sportif will acquire the rights to manufacture and distribute apparel with the Tiger logo in the French, German, and Spanish markets it currently serves. Based on this information, which internationalization tactic is Tiger Tenniswear discussing with Le Coq Sportif? Licensing Exporting Franchising Joint Venture

Licensing

Piratetown Coffee produces whole bean and ground coffee that can be found in stores across the nation. Recently, the company has instituted an integrated IT infrastructure with their coffee bean suppliers, and has transitioned to selling its products direct to customers via the internet instead of wholesaling to retailers. Given these actions, which of the following strategies is Piratetown Coffee most likely following? Low-cost provider Niche Low-cost Low-cost differentiation Broad differentiation Niche differentiation

Low-cost provider

Piratetown Coffee produces whole bean and ground coffee that can be found in stores across the nation. Recently, the company has instituted an integrated IT infrastructure with their coffee bean suppliers, and has transitioned to selling its products direct to customers via the internet instead of wholesaling to retailers. Given these actions, which of the following strategies is Piratetown Coffee most likely following? Broad niche Low-cost provider Broad differentiation Niche differentiation Niche Low-cost

Low-cost provider

Which of the following is NOT a value driver that can be a starting point for revamping the value chain in order to differentiate? Adding features such as enhanced safety, styling, or environmental sensitivity Lowering unit costs by scaling up Pursuing high quality processes and materials Enhancing services such as delivery, returns, repairs, or technical assistance Utilize high quality HRM to hire, retain, and motivate the best workers

Lowering unit costs by scaling up

BONUS QUESTION: In class we discussed a company that entered the Indian market via franchise, but the franchisee's (Vikram Bakshi) success greatly exceeded expectations. Consequently, the franchisor has been attempting to legally remove the franchisee, and recently convinced suppliers to block shipments of a key input. Which company was that? Wal-Mart Uber McDonald's WWE SiriusXM

McDonald's

Which of the following is a fundamental component of the business model? It must include a proposition for driving perceived customer value of the firm's products/services above the price of the products/services The cost structure must be such that the price of the products/services exceed the cost to the firm The profit formula must include a cost that exceeds the price in order to survive and achieve superior profitability Only choices a and b are required for an effective business model Answer choices a, b, and c are all fundamental parts of the business model. Only answer choices a, c, and d are fundamental parts of the business model

Only choices a and b are required for an effective business model

In class, we discussed 4 basic principles for strategy offensives. Which of the following is NOT one of them? Be swift and decisive Attack rivals in their weakest markets, on their weakest products, or along their weakest value chain activities Use the element of surprise Only engage in strategic offensives when you are the "rat in the corner," that is, when you have no other alternative Base strategic offensives on your strongest competitive assets

Only engage in strategic offensives when you are the "rat in the corner," that is, when you have no other alternative

Which of the following mission statements most effectively answers the questions of who we are, what we do, and why we are here? Our mission is to increase our profits by 5%, be viewed as a leader by our customers, and exceed the competition. Our mission is to help people and businesses throughout the world realize their full potential. Our mission is to refresh the world; to inspire moments of optimism and happiness; to create value and make a difference. Our mission is to give our customers the best food and beverage values that they can find anywhere and to provide them with the information required for informed buying decisions. We provide these with a dedication to the highest quality of customer satisfaction delivered with a sense of warmth, friendliness, fun, individual pride, and company spirit.

Our mission is to give our customers the best food and beverage values that they can find anywhere and to provide them with the information required for informed buying decisions. We provide these with a dedication to the highest quality of customer satisfaction delivered with a sense of warmth, friendliness, fun, individual pride, and company spirit.

As we discussed in class, which of the following companies provides a good example of the focused low-cost strategy? Lululemon focuses exclusively on producing high-quailty yoga and athletic apparel. HBO Now provides online streaming of HBO original content and licensed movies to subscribers who do not have a traditional cable or satellite television subscription. DirecTV provides a satellite alternative to traditional cable television packages, with a range of channel lineups from which customres can choose, and value-added features such as internet streaming, NFL Sunday Ticket, DVR, and partnership with AT&T to offer customers discounted wireless services. Redbox offers cheap movie and video game rentals from self-serve kiosks frequently found at pharmacies and grocery stores.

Redbox offers cheap movie and video game rentals from self-serve kiosks frequently found at pharmacies and grocery stores.

Which of the following is NOT one of the four routes to achieving a competitive advantage through differentiation? Revamp the value chain to eliminate some costs Adding tangible features that increase customer satisfaction Adding intangible features that increase customer satisfaction Adding features that lower the buyer's overall costs of using the product All of the above are fundamental approaches to differentiation

Revamp the value chain to eliminate some costs

Which of the following is true regarding strategic intent? Strategic intent is when a company spreads resources evenly among achieving financial objectives and strategic objectives, and defending its existing market share Strategic intent occurs when a firm's leaders intend to develop firm strategy once the certainty of future states and conditions are known Strategic intent is when a company concentrates the full force of its resources and competitive actions toward achieving an ambitious strategic objective Strategic intent is when a company adopts the balanced scorecard approach to assess its progress toward objecti

Strategic intent is when a company concentrates the full force of its resources and competitive actions toward achieving an ambitious strategic objective

Joe the Plumber has run his own company in Ohio for 17 years. Increasingly over the past several years, business has been good as the other plumbers in his small town have all retired, but the municipal growth rate has remained strong, leaving Joe with as many service calls as he cares to take. Other than being so busy with service calls, Joe's only complaint is the increasing cost of copper. As a man who values quality, Joe refuses to use anything but copper pipes and fittings in his work--he believes his reputation is staked on quality and refuses to compromise on this point. However, the copper is the main cost driver of pipes and fittings, and as the cost of goods increases, his value proposition shrinks. Given the information above, which of the following is the strongest force Joe the Plumber is currently facing? Rivalry among competing sellers Supplier strength Threats from substitutes Buyer strength Potential new entrants

Supplier strength

Which of the following is the best example of a socioeconomic factor affecting a firm? The "eat local" movement drives more customers to buy food stuffs from farmer's markets and through co-ops, cutting into the revenues of Albertson's A continuing economic boon creates a labor shortage for Kroger, forcing the company to pay higher wages to attract employees, thereby increasing operating costs An increase in food taxes cuts into Whole Foods' revenues in the state of Texas Power outages from hurricane Irma leads to 4.5 tons of spoiled dairy products in Publix stores throughout Florida, driving up operating costs for the firm

The "eat local" movement drives more customers to buy food stuffs from farmer's markets and through co-ops, cutting into the revenues of Albertson's

Which of the following is NOT one of the five conditions that make first-mover advantages attractive? The rate of change in your industry is high and technology is constantly changing Learning curves make it hard to copy a first mover You can set the technology standard There are significant switching costs for customers Patent, copyright, and/or trademark protections mean competitors will have legal hurdles in imitating your products

The rate of change in your industry is high and technology is constantly changing

Which of the following statements is TRUE regarding intangible resources? They include technologies such as production processes They are distinct from tangible resources in that they deal more with how those resources are deployed. They are often more important than tangible resources, but usually harder to identify They can't be seen so they don't exist, obvs.

They are often more important than tangible resources, but usually harder to identify

According to the stakeholder theory of the firm, organizations should serve "anyone who can affect or is affected by the firm." True False

True

According to the stakeholder theory of the firm, organizations should serve "anyone who can affect or is affected by the firm." True False

True

All things considered, it makes economic sense for a corporation to behave in a socially responsible manner. True False

True

Diversification can be achieved through corporate venturing True False

True

In adopting an integrative social contracts orientation toward ethics, a firm provides local managers some moral free space to decide what additional rules and policies may be appropriate, but will simultaneously have a set of universal ethical norms that will take precedence. True False

True

In adopting an integrative social contracts orientation toward ethics, a firm provides local managers some moral free space to decide what additional rules and policies may be appropriate, but will simultaneously have a set of universal ethical norms that will take precedence. True False

True

It is illegal for US companies to bribe foreign officials even when bribing foreign officials is considered normal and acceptable behavior within that foreign country. True False

True

One factor that makes expanding internationally a challenge is that firms have different home-field (or home-country) advantages in different countries. True False

True

One reason a firm might wish to pursue international growth is to further capitalize on core competencies. True False

True

Outsourcing value chain activities can strengthen a firm's competitive position. True False

True

Principled moral development is to ethical universalism as conventional moral development is to ethical relativism. True False

True

Based on our in-class discussion of the Virgin company, which corporate strategy would you say they are following? Related diversification Unrelated diversification Single-business focus Strategic offense Strategic incorporation

Unrelated diversification

Which of the following is a disadvantage of the global strategy? All of the above are disadvantages of the global strategy It creates a greater opportunity for global competitive advantage It's difficult to adequately respond to local conditions It creates a high degree of efficiency

t's difficult to adequately respond to local conditions