Strategic Management
Strategy as _______ refers to a firm's place in the industry relative to its competitors.
position
Economies of _______ refer to a cost advantage that is created when a firm can produce a good or service at a lower per unit price due to producing the good or service in large quantities.
scale
H&S Co is a company that produces chocolates. They are looking to improve their sales as well as making their company more desirable and unique in the industry. What is the BEST step could they take to ensure sustainable competitive advantage?
Add in a new ingredient that will add a unique flavor to their chocolate recipe that will be difficult to imitate and add a patent on the recipe.
Strategic issues are identified during what stage?
After internal and external analysis
Contemporary field to strategic management draws on multiple traditions. Which of the following traditions and event are NOT contributors to contemporary understanding of strategic management? Ancient Chinese Strategists, 20th Business Practitioners, Military History, Scientific Management, All of the other responses are correct
All of the other responses are correct
Why are cash and trucks NOT considered to be strategic resources?
An organization's competitor can readily acquire them
Many large companies, such as Microsoft and Facebook, are trying to enter the video game streaming service industry with their platforms Mixer and Facebook gaming. Although the platform is easily replicated, Twitch, an Amazon platform, still maintains competitive advantage and majority market share of the industry. What is the isolating mechanism that could explain Twitch's success?
Causal Ambiguity
________________ is when the economic value creation of a firm is greater than its competitors.
Competitive advantage
Which is not a piece of the "general or macro-environment"? Competitors trends Technological trends Social trends Demographic trends Economic trends
Competitors trends
Suppose that you are a competitor in the fast-food industry. After years of growing your business, you are still faced with fierce competition. You want to get out of the industry but are held back by exit barriers. Which of these is an emotional exit barrier that might be holding you back?
Exiting the market will lead to thousands of layoffs
VT t-shirt company is an organization within the fashion industry. Which of the following companies would most likely be grouped with it in a strategic group map? UCLA sports apparel UVA hat company ODU jewelers FSU T shirt Incorporated George Mason Jean Incorporated
FSU T shirt Incorporated
VT dining services is having trouble keeping student employees in their dining halls. There is no shortage of workers as they are always being hired. However, since so few people work there for several months, many employees are new to the job and don't fully understand the operations yet. What kind of weakness does this represent for VT dining services?
High employee turnover
What is an advantage of cost leadership strategy? High market share can mean high profits. Low enterprises might lead to lower investment in market research and being late to detecting emerging market trends. Large quantities of items are required due to margins being slim on many levels. If quality is seen as too low, the reputation of the brand might be harmed. Emphasis on efficiency makes it difficult to add or make changes quickly if needed in the marketplace.
High market share can mean high profits.
The narrow (or focused) cost leadership strategy relies on producing a ___________ quantity of different goods for ___________.
High quantity; low price
Company A and Company B both compete in the same market. Company A can produce their product much more efficiently due to a patented design process. This patent provides ________ to sustain competitive edge.
Isolating mechanisms
Which of the following is NOT true about strategic issue? It becomes the strategic focus of the firm. It will assist the org to move towards its vision. It will change over time. It is a short term issue. It is reduced to a concise sentence, in order to be easily understood.
It is a short term issue.
The airline industry is highly competitive and is known for bankruptcies and massive financial losses, yet Southwest Airlines has had decades of profitable years and grown to operate hundreds of airplanes in many cities. According to the textbook, there are several things that Southwest has done differently that helped lead to its success. Which of the following is NOT one of the ways that Southwest differs from other airlines in the industry?
Keeping operating costs relatively low
Raymond's restaurant needs to know if it will have enough money available to pay its bills that come at the end of the month, such as rent and utilities. In order to do this, Raymond calculates his current ratio by dividing total assets by total liabilities. This is a good example of which kind of financial performance measure?
Liquidity measures
Southwest Airlines, founded in 1977, has always differed from the traditional airline industry in many ways. A few examples of this would be the strong sense of company loyalty from passengers and employees and their stock ticker (LUV) to pay homage to where they originated (Love Fields). These would both be examples of Southwest's
Organizational Culture
IKEA allowing customers to use virtual reality from their mobile devices and see how a piece of furniture would look in their own home exemplifies which of the following primary activities of IKEA's value chain:
Service
Online shopping has transformed the retail market. Failure to successfully compete against Amazon has forced long-stable retailers like Sears, JCPennys, KMart, and Neiman Marcus to close stores or shut down all together.
Technology
A business is analyzing its resources and capabilities and has found a resource that is valuable, rare, organized to capture value, but is not costly to imitate. What is the likely result of such a resource?
Temporary Competitive Advantage
The Ritz Carlton is a luxury hotel chain. The company operates over 100 luxury hotels in numerous counties. The Ritz Carlton is known as a symbol of "high society" and prestige. Room rates vary by location. The most expensive suite they offer is $26,000 per night. Which statement below best reflects the Ritz Carlton's generic business strategy?
The Ritz Carlton used a focused differentiation strategy. The hotel differentiates their offerings by promising their affluent customers renowned services. The brand prides itself on top notch care and comfort.
Your boss asks you to complete a SWOT analysis of your company. He wants you to understand why this is important and how it will benefit the company: All of the following are reasons he wants you to do a SWOT EXCEPT... Identify firm strengths determine strategic issue identify threats in firm's environment develop firm strategy identify external weaknesses
identify external weaknesses
A pizza shop plans to deliver pizzas to households. The delivery would be made without any extra charge. It hopes to execute this strategy in the suburbs. This is an example of a(n) _________ strategy.
intended
The 2 competitive dimensions to a business-level strategy are...
A firm's source of competitive advantage and a firm's scope of operations
_______________ help an organization create narrower targets that should provide clarity, transparency, and accountability to employees.
SMART goals
Angel has her own food restaurant downtown and the restaurant has not been performing well. She assesses her prices to discover that a restaurant next door offers menu items that are slightly lower than hers. Additionally, there are other competing restaurants that offer relatively the same menu option. What could be said about Angels restaurant?
Angel's food restaurant is stuck in the middle.
A new, independently owned Italian restaurant has opened in a town that currently has 2 other Italian style restaurants, both franchise establishments. The owner knows that if his business receives great reviews in its first few years of being open, he will have the ability to raise prices higher than competitors because of its distinguished food and service. However, because the restaurant is new, they only have a small number of recurring customers. If he raises prices now, frequent customers may not come back. The setback of establishing prices at an amount that customers will want to pay is referred to as Porter's force of _____________.
Bargaining power of buyers
A business has organizational systems, process and structure in place to capitalize on a strategic resource for competitive advantage. This is an example of:
Being organized to capture value
A firm that attempts to meet the business level strategies in the middle, meaning they are able to offer low prices and unique products is considered to be offering a ______________ strategy.
Best cost
Suppose that a trendy new electronics store opened in downtown Blacksburg. They have decided to sell only premium electronics. Their motto is also "You want it, we got it!" What competitive advantage are you trying to achieve, and what market are you trying to sell to?
Broad differentiation
While intangible resources are more likely to meet the criteria for strategic resources, without ________ to capture and exploit those resources for added value firms will fail to create advantages over competitors.
Capabilities
George is a newly promoted CEO of a shoe company called Lyson. Lyson has experienced difficult times in the past couple of years, so George is inclined to conduct a thorough analysis, both internally and externally of Lyson to find a solution. How can George act upon the results he would have found in the "O" section of the SWOT analysis?
Capitalizing on the hype of a rising athlete by offering them a shoe deal.
A group of Virginia Tech students who liked movies decided to develop their own movie, and it has been very popular so far. What would best protect their intellectual property?
Copyright
In opening your electronics store, you decided to follow a focused differentiation strategy. Which of these tactics would BEST help you achieve this strategy? Host weekly sales and raffle prizes, like other stores. Sell convenience store items in the store, such as soda and chips. Create a unique shopping experience that allows the customer to come and have a customized one-on-one "technology makeover," catering to their individual electronic needs. Offer a 30-day buyback guarantee to entice all potential electronics customers to shop at your store. Sell your products at a lower price than any other electronics store in Blacksburg.
Create a unique shopping experience that allows the customer to come and have a customized one-on-one "technology makeover," catering to their individual electronic needs.
XY Company was created this year to produce disposable masks due to the rapid increase in demand caused by the Covid-19 global pandemic. To fund the start-up cost of the business, sole owner, Dave, applied for a small business loan at a vey low interest rate. Unfortunately for Dave and his business, the first few batches of masks were recalled after consumers noticed the quality control issue with the ear straps. This recall cost Dave nearly $500,000 of total loss. As a result, Dave was forced to take on more debt to keep the business afloat until he could continue turning a profit. Dave is now worried that if he cannot pay off at least one of his two loans soon, he may not be able to get another one if he encounters another issues similar to his last. What ratio could Dave look at to either help ease his concern or confirm his suspicion?
Current ratio
Starbucks realizes the importance of repeat customers and has taken a number of steps to satisfy and to attract regular visitors to their stores. For example, Starbucks rewards regular customers through a rewards program that allows customers to redeem the points they have accumulated for free drinks, bakery items, or merchandise. They also offer all customers free Wi-Fi access (Miller, 2010). Based on what you know of competitive advantage, what advantage is Starbucks MOST likely to be exercising by offering these to their customers?
Customer loyalty
The organization you work for is looking to borrow more money for a large proposed project. You have been tasked with analyzing the amount of cash the organization will be able to take out and remain financially stable. Which of the following measure will be most helpful to consider for your decision making?
Debt-to-Equity Ratio
Burt's Bees marketing team conducted their quarterly SWOT analysis and wants to get going on developing new strategies. Before they begin, what step needs to be taken before new strategies are created?
Define the strategic issue.
The organization you work for is looking to use a best-cost strategy. Which of the following is an example of how your company can successfully implement a best-cost strategy? Cut costs Target a narrow market Target a broad market Diversify their product mix Diversify their product mix and cut costs
Diversify their product mix and cut costs
Which of the following is an organizational example of weakness under the SWOT framework? Dubious leadership and CEO scandals plague corporations. Poor communication skills keep job seekers from being hired into sales and supervisory jobs. Having high levels of cash flow gives firms discretion to purchase new equipment if they wish to. A tight job market poses challenges to new graduates. The high cost of gas creates opportunities for substitute products concerns about worldwide pollution are a threat to petroleum products.
Dubious leadership and CEO scandals plague corporations
A business-level strategy is a concept utilized to address how a firm will compete in an industry. The best way to utilize the strategy is to look at strategies with a broad scope. Professor Michael Porter of the Harvard Business School created a set of 4 generic strategies used to position a business within its industry. Out of the terms listed below, which is NOT one of Porter's 4 generic business-level strategies? Broad differentiation Focused differentiation Focused cost leadership Broad cost leadership Economic value creation
Economic value creation
__________ are created when the costs of offering goods and services decreases as a firm is able to sell more of that item.
Economies of scale
A _______ is a major consideration in strategic assessment, source of resources for an organization and influences the various strategic decisions organizations face.
Environment
You work at a startup company that prides itself on creating products that help consumer's everyday lives. Before your next project, your boss asks you to conduct an analysis of the current social trends, political issues, and competitive threats. Your boss is asking you to conduct an analysis of the current _____________.
Environment
Which firm has a competitive advantage over the other three given the table below? Firm Willing to pay price Cost to produce A $36 $22 B $41 $28 C $28 $9 D $56 $38
Firm C
The difference between broad business-level strategies and focused (or narrow) business-level strategies is:
Focused business strategies appeal to niche demographics rather than appealing to the general consumer.
Redbox rents DVDs for $1.00 in vending machines placed in areas with high foot traffic. What business level strategy do they have?
Focused cost leadership
What type of environment is described by overall trends, such as social, technological, demographic, and economic conditions?
General environment
Understanding the intensity of rivalry among an industry's competitors is important because the degree of intensity helps shape the industry's profit potential. Of particular concern is whether firms in an industry compete based on price. When competition is bitter and cutthroat, the prices competitors charge, and their profit margins tend to _________. If, on the other hand, competitors avoid bitter rivalry, then price wars can be avoided and profit potential _____ .
Go down; increases
You're a vital part of your company. You work mostly with arrival logistics, such as in-coming inventory, material handling, and truck management. Within the value chain, you are part of the ______ function, which is considered one of the _______ activities.
Inbound Logistics, Primary
Zappos is known for its unique company culture and environment of creativity for their employees. This is an example of...?
Intangible asset
In 2016, the founder and CEO of Tesla Elon Musk attempted to change the direction of his company from a purely electric automobile company to one that also caters to clean energy generation and storage. In rebranding the company, Musk decided to change its ________________ from "to accelerate the world's transition to sustainable transport" to "to accelerate the world's transition to sustainable energy"
Mission statement
____________ is profit earned per dollar of revenue and can be seen reflected on financial statements as an important indicator for company performance
Net Profit Margin
Which of these criteria does NOT help an organization assess strategic resources or capabilities potential to generate competitive advantage using a resource-based theory approach:
New-ness
A firm, such as Walmart, follows a cost leadership strategy. This means that they...
Offer products or services with acceptable quality and features to a broad set of customers at a low price
You are the VP of strategy and are trying to identify a specific strategic issue for your company. Based on your knowledge of strategic issue identification, which of the following should NOT be kept in mind when defining your strategic issue? The strategic issue is ideally reduced to one concise sentence and starts with the word how. The strategic issue is derived from the facts and data provided by the external and internal analysis and its synthesis throughout the SWOT framework. Once decided, the strategic issue will remain the same over time because the external. competitive and internal dynamics are always constant. The strategic issue has to be a long-term issue who resolution will help move the organization toward its vision. A strategic issue, when identified correctly and used effectively, becomes the strategic focus of the organization.
Once decided, the strategic issue will remain the same over time because the external. competitive and internal dynamics are always constant.
Which of the following is a TRUE statement about strategic management?
One critique of strategic management by firm managers or executives regards the high levels of investment required yield the the promised benefits.
_______ is an isolating mechanism that has to do with the course a firm has taken over time, including decisions made, experience gained, and accumulated learning along the way
Path dependence
Cory is the chief of operations of an oil company operating out of the Gulf of Mexico. His responsibilities are based on keeping the rigs and fracking stations on course with projections and handling any complaints from their operations. A new President and Congress have just been elected, and one of the largest bills responding to environmental concerns about fracking leading down the pipes are bills that could possibly devastate Cory's operations within the Gulf. Of all the facets of a PESTEL analysis, which are the two that should have taken into account this possibility upon further inspection?
Political and Legal
Matt owns a cabinet company where he buys cabinets wholesale and installs them in people's homes. There is a new mass cabinet producer where Matt can buy cabinets for cheaper that are the same quality. Matt should revisit what part of his value chain?
Procurement
What model examines the strategic resources and/or capabilities of the firm to determine if they provide a competitive advantage?
Resource-based view
The Valuable aspect of the VRIO framework is best defined as:
Resources aiding in improving the organization's effectiveness and efficiency while neutralizing the opportunities and threats of competitors
Davis has invented a new miracle pill that cures hangovers. Which of these would not be necessary for Davis to receive a patent from the US Patent and Trademark Office?
Show that it is 100% effective
The isolating mechanism that arises from interrelationships within a firm, along with relationships within or across a business process, is called:
Social Complexity
In PESTEL analysis, _______ factors include trends in demographics such as population size, age, and ethnicity as well as cultural trends such as attitudes toward obesity and consumer activism.
Socio-Cultural
The S in SMART goal stands for
Specific
Sets of firms that follow similar strategies to one another best describes which of the following?
Strategic group
You are a C-suite executive for Subway and conducting a SWOT analysis to pull the most valuable information to determine the strategic issue. You find that Subway has healthy menu options, economical pricing, and a simple business format. Which element of SWOT do these describe?
Strengths
Which of the following statements regarding to the creation of a SWOT analysis is TRUE? The VRIO framework can be used to find organizational strengths and weaknesses, while the PESTEL framework can be used to find organizational opportunities and threats. Value Chain Analysis can be used to find strengths and weaknesses while the VRIO framework can be used to find organizational opportunities and threats. Porter's 5 Forces can be used to find organizational strengths and weaknesses while Value Chain Analysis can be used to find organizational opportunities and threats. The VRIO framework can be used to find organizational strengths and weaknesses, while Value Chain Analysis can find organizational opportunities and threats.
The VRIO framework can be used to find organizational strengths and weaknesses, while the PESTEL framework can be used to find organizational opportunities and threats.
You are a CEO of a major corporation that is growing very quickly. As a result, you are able to sell more items, which will affect your cost of goods and services since>
The cost will decrease as a result of economies of scale
This internal tool is used to see if a firm's activities can provide a competitive advantage by examining primary and support activities of the firm.
Value Chain Analysis
John is a new employee at Hush Sodas and has bee assigned to a strategic process team that is creating a SWOT framework for Hush Sodas. Within the SWOT analysis, John has been tasked with an internal analysis to understand the firms strengths and weaknesses. Which of the following is the best additional tool that John should use to complete the internal analysis? Porter's 5 Forces Value Chain analysis NPV analysis Development of SMART goals PESTEL
Value Chain analysis
Western Living has now been in the market for several years and dominated the industry. They have a strong reputation and hold the highest market share. They have become the most profitable company in the outdoor recreation industry with very few competitors to scale. However, a new company, Adventure Awaits, has just entered the market, stirring a lot of talk from Western Living's headquarters. What is the most likely result that Western Living will experience from Adventure Awaits joining the industry?
The profit potential in the industry will decrease
When asked 98% of executives listed the most important characteristics of effective strategic leaders as having a "strong sense of vision" first. Surprisingly, 90% of those surveyed also expressed a lack of confidence in their own ability to create a vision. Many organizations that do have vision statements find that employees do not embrace and pursue the visions. Having a well-formulated vision employees embrace can therefore give an organization an edge over its rivals. Why can having a well-formulated vision give an organization an edge over its rivals?
The vision statement provides an aspirational goal of what the company wants to do and unites and drives its workers toward that vision.
Why would Subway's move to cut back the amount of salt in their sandwiches lead to other fast casual companies examining if they need to do the same?
There was a societal shift towards healthier eating, so there would be a macro- environment concern
Why might a company be in the same industry but not in the same strategic group?
They do not have any similar characteristics
The U.S. pharmaceutical industry is expected to top $685.45 Billion by 2023. Throughout the last 8 months, Global Pharmaceuticals has increased drug manufacturing by almost 25% of their forecasted budget for 2020, resulting in $1,500,000 in current assets. While they are seeing an increase in current assets, they have also seen a 40% increase in vendor accounts payable and have $850,000 in total current liabilities. Considering GP's metrics, how confident are you they will be able to fulfill their upcoming financial obligations?
They will be fine since they have a current ratio higher than 1.0
A new water company is looking to service the town of Blacksburg. They analyze the cost to build the appropriate infrastructure needed to compete with the already established providers. This is an example of using which of the Five Forces in their analysis?
Threat of potential entrants
Which SWOT framework point is an example of the following statement? "Concerns about worldwide pollution are an issue to petroleum based products?"
Threats
The anonymity surrounding KFC's famous fried chicken recipe is an example of a:
Trade secret
You are a Strategic Manager work for Rieper & Crane Inc., an arms manufacturer. For most of the company's existence, Rieper and Crane Inc. has focused on maximizing its profit. However, due to some shake ups in management, the company has decided it needs to improve its public image and have come to you for assistance. Which model would most likely be used to measure the company's progress?
Triple Bottom Line
You are a financial analyst for an Australian Steakhouse chain called Sydney Steakhouse, which is headquartered in New York. Sydney Steakhouse is very well known and has 1,000 stores in North America and Australia. It also has its standard dishes such as the Cowboy steak and Australian onion. Which of the following would be considered an opportunity for Sydney Steakhouse? Untapped Markets in Europe Competitor Menu Items Friendly staff Limited menu options competitive marketing team
Untapped markets in Europe
Economic Value Creation (EVC) is the difference between ______________ and ________________.
What a customer is willing to pay; the cost incurred to produce the product
You have an affordable retail clothing business with the goal of gaining market share as soon as possible. You have been in business for about 2 years and are looking for ways to gain a sustainable advantage over your competitors. As part of your preparation, you are assessing the business internally by conducting analyses on the financial data and historical trends of your company, as well as benchmarking against competitors like H&M, Burlington and Macy's. Which strategic question are you currently asking yourself?
Where are we?
The key question examined by strategic management is:
Why do some companies outperform other companies?
You are the CEO of a major tech corporation. You decide to evaluate the company's internal and external environment to set a strategy for next quarter. You have evaluated the internal strengths and weaknesses, and the org's external threats. What is most likely the outcome?
You still need to evaluate the company's external opportunities in order to have a comprehensive strategy for the organization.
The ___________ often emerges from an analysis of the data and information from the internal and external assessments as summarized in the SWOT and defines what needs to be addressed to move towards success.
strategic issue
