Strategy Final Exam

The following shows Porter's Five Force Model and some of the factors that increase the strength of each force. Which of the following contains the correct labels for each blank? (A) high; (B) high; (C) low; (D) consumer's surplus; (E) high; (F) low (A) high; (B) low; (C) high; (D) value; (E) high; (F) high (A) low; (B) high; (C) high; (D) buyer's surplus; (E) high; (F) high (A) low; (B) low; (C) high; (D) buyer's surplus; (E) high; (F) high

(A) high; (B) low; (C) high; (D) value; (E) high; (F) high

Disruptive innovation is when a __(i)__ product based on technology that has __(ii)__ and __(iii)__ relative to the incumbent product. (i) incumbent (ii) lower cost (iii) higher price (i) new (ii) lower value (iii) higher price (i) new (ii) lower value (iii) lower price (i) incumbent (ii) lower value (iii) lower price

(i) new (ii) lower value (iii) lower price

Which of the following are cost drivers? 1. the learning curve 2. firm revenues 3. economies of scope 4. complementary products

1 & 3

fill in the blank

1. superior (value-cost) market position 2. defendable market position

All of the following statements about buyer and supplier power are true, EXCEPT: Buyer power decreases when there are more buyers in the industry. Supplier power depends on the switching costs of the buyer. A firm working with strong suppliers and strong buyers will generate high profits. A slower market growth rate shifts the balance of bargaining power toward buyers and away from firms in the supplying industry.

A firm working with strong suppliers and strong buyers will generate high profits

Fill in the blanks

A. Buyers Surplus: Value - Price B. Firm's Surplus: Prive - Cost C. Value Created: A firm's total economic contribution = value - cost

Which of the following is NOT a critical aspect of strategy or building sustainable competitive advantage? Preventing competitors' imitation of the firm's product/service Improving customers' perceived value Lowering the costs incurred in making/selling a product/service Retaining customers by building switching costs All of the above are critical elements of building sustainable competitive advantage

All of the above are critical elements of building sustainable competitive advantage

Based on the exhibits 6 and 9 (below) and your knowledge of the Apple case, which of the options below offers the best advice for Apple regarding the relationship between its PC business (Macs) and its MP3 player business (iPods) in 2008? Apple should focus primarily on its MP3 player business, because iPods don't have much overlap with Macs in key resources and capabilities, and by 2007 it is already selling over six times as many iPods as Macs, and the growth in iPod unit sales has been much higher than the growth for Macs. Apple should focus primarily on its PC business, because it is facing strong competition from firms like Sony and Microsoft in the MP3 player business, forcing it to lower iPod prices by almost 50% between 2004 and 2008. Apple should move its focus away from both PCs and MP3 players, because these industries face significant uncertainty going forward. It should diversify into unrelated industries like music sales and retail stores, to reduce the riskiness of its cash flows. Apple should continue to support both PCs and MP3 players, because its strengths as a differentiator, with superior value added from user interfaces to product design, offer a competitive advantage in both industries.

Apple should continue to support both PCs and MP3 players, because its strengths as a differentiator, with superior value added from user interfaces to product design, offer a competitive advantage in both industries.

The following is an excerpt of a New York Times article, "Former Star Google and Uber Engineer Charged With Theft of Trade Secrets" by Mike Isaac on August 27, 2019: SAN JOSE, Calif. — Anthony Levandowski was once one of Silicon Valley's most sought after technologists. As a pioneer of self-driving car technology, he became a confidant of Larry Page, a co-founder of Google, and helped develop the search giant's autonomous vehicles. Uber wooed him to gain an edge in self-driving techniques. Venture capitalists threw their money at him. But on Tuesday, Mr. Levandowski, 39, fell far from that favored stature. Federal prosecutors charged him with 33 counts of theft and attempted theft of trade secrets from Google. At an arraignment in a federal courthouse in San Jose, Calif., a disheveled Mr. Levandowski, dressed in a blue blazer and dark brown pants and accompanied by his parents, posted $2 million bail and was ordered to wear an ankle monitor after prosecutors argued that he was a flight risk. The criminal indictment against Mr. Levandowski from the United States Attorney's Office for the Northern District of California opens a new chapter in a legal battle that has embroiled Google, its self-driving car spinoff Waymo and its rival Uber in the high-stakes contest over autonomous vehicles. The case also highlights Silicon Valley's no-holds-barred culture, where gaining an edge in new technologies versus competitors can be paramount. Based on the above article, which of the following is the most accurate statement about Google's Strategy. A. Google relies on intellectual property rights as one of its value drivers. B. Google uses intellectual property rights as an isolating mechanism to prevent imitation. C. Google relies on intellectual property rights as one of its cost drivers. D. Google uses criminal litigation as an isolating mechanism to prevent imitation.

B. Google uses intellectual property rights as an isolating mechanism to prevent imitation.

The above figure depicts the Efficient Boundaries Model. The dashed line represents the sum of coordination and production costs. According to Transaction Cost Theory, the following is TRUE: Beyond point a, the firm has economic incentives to outsource the activity. Beyond point a, the firm has economic incentives to bring operations in-house. Beyond point c, the firm has economic incentives to outsource the activity. Beyond point c, the firm has economic incentives to bring operations in-house.

Beyond point c, the firm has economic incentives to bring operations in-house.

Which of the following represents the best example of complementary products? I. Starbucks coffee and Diet Coke II. a Walmart Supercenter and a Walmart Neighborhood Market III. an iPhone and the Netflix app IV. Gucci handbags and Zara dresses A. I only B. II only C. III only D. II, III, and IV

C. III only

The difference between product value and market price is called: A. value created B. the firm's surplus C. the buyer's surplus D. the firm's economic contribution

C. the buyer's surplus

Which of the following is NOT an important factor that affects a firm's profitability? The firm's unique pool of resources and capabilities Macroeconomic forces The CEO's salary Industry conditions

CEO's salary

Which of the following is NOT true for firms that pursue a differentiation strategy? Raising the price of the product to the extent that the buyer's surplus is greater than the competitor products' buyer surplus can be an effective approach. Charging the same price while increasing value will always attract new customers. This strategy is more attractive when the value-improving investments produce a higher return than the efforts to reduce costs. Increasing value entails the challenge of additional costs, possibly reducing the profits (price-cost).

Charging the same price while increasing value will always attract new customers.

Which of is true of consistency or fit? Consistency or fit is good for well-positioned firms following a generic strategy in stable industries Good strategy execution always involves high consistency or fit. Consistency or fit refers to a firm's diversification strategy. Consistency or fit is where there are multiple, consistent organizing dimensions, such as function and geography, and managers report along two hierarchies instead of one

Consistency or fit is good for well-positioned firms following a generic strategy in stable industries

The following is an excerpt from a Reuters article "Exclusive: U.S. oil industry seeks unusual alliance with Farm Belt to fight Biden electric vehicle agenda," by Jarrett Renshaw and Stephanie Kelly from October 25, 2020: "The U.S. oil industry is seeking to forge an alliance with the nation's corn growers and biofuel producers to lobby against the Biden administration's push for electric vehicles... The effort to promote liquid fuels and combat expected federal subsidies for electric vehicles marks an unusual attempt by the petroleum industry to join with its long-time rivals, reflecting the scale of its concern over President Joe Biden's measures to combat climate change and tamp down fossil fuels. While the oil industry and biofuels producers are competitors for space in America's gas tanks, they share a desire to ensure a future for internal combustion engines. The effort also reflects the shifting political landscape in Washington. The oil industry's influence has waned since Biden replaced Donald Trump as president, but the farm belt remains a powerful political constituency. The American Fuel and Petrochemical Manufacturers (AFPM), an oil refining trade group, confirmed it has been contacting state and national representatives of the corn and biofuel industries in recent weeks to seek support for a policy that would reduce the carbon intensity of transport fuels and block efforts to provide federal subsidies for electric vehicles. That proposal would be an alternative to Biden's goal of electrifying the nation's vehicle fleet and would ensure a market for liquid fuels like gasoline and corn-based ethanol. The refining sector has previously made attempts to find common ground with their biofuel rivals, but the latest efforts have taken on an added sense of urgency given the Biden agenda." The article describes which industry force from the Value Net: Cooperation between the firm and its competitors Effective Complements Cooperation between the firm and its suppliers Cooperation between the firm and its buyers

Cooperation between the firm and its competitors

Which of the following describes best the firm's goal in a competitive world? Making more profit Having the highest market share Creating and capturing more economic value than rivals consistently over time Being publicly recognized as one of the top 100 companies

Creating and capturing more economic value than rivals consistently over time

All of the following are elements of Porter's Diamond Model EXCEPT: Demand conditions Related and supporting industries Cultural constraints Firm strategy, structure, and rivalry

Cultural constraints

The following are statements pulled from the websites of four firms: "Our strategy is to provide unrivaled customer service." "Our strategic intent is to always be the first mover." "Our strategy is to move from defense to industrial applications." "Our recovery and expansion strategy targets emerging markets." Which of the following sentences are TRUE about what these statements have in common: A. these statements describe how the firms plan to create and capture more value than their rivals. B. these statements describe how to achieve a sustainable competitive advantage. C. these statements are all strategies. D. these statements represent tactics and/or projects.

D. these statements represent tactics and/or projects.

Each of the following is a sig of the Mature Stage of an industry, EXCEPT: The persistence of niche markets Decline in the market growth rate Decreased buyer experience with industry products Higher concentration of market share among large, relatively similar firms

Decreased buyer experience with industry products

What Causes a Shakeout? Dominant firms with strong isolating mechanisms force out weaker competitors and deter new entrants The maturation of the product life cycle Competition slows among industry firms Emergence of a "dominant design"

Dominant firms with strong isolating mechanisms force out weaker competitors and deter new entrants The maturation of the product life cycle Emergence of a "dominant design"

Assess this statement: Natural resources are necessary for national wealth. False. Japan is the 3rd largest economy. True. Natural resources, such as oil in the North Sea, are the key source of a nation's wealth.

False. Japan is the 3rd largest economy.

Which of the following statements about diversification is/are TRUE? I. A diversification event involves entry into a new industry. II. Diversification adds new products and supply chain activities to a firm. III. As a motivation for diversification, risk reduction is a higher priority than improving returns in each business unit. I only I and II I and III II and III

I and II

Which of the following statements about Cost Drivers is/are TRUE? I. A firm can have lower costs than its rivals because its inputs in materials, labor, capital, information, or technology are cheaper. II. Learning costs is a cost driver for firms that occurs when its buyers incur costs to adopting the firm's product or service. III. In many circumstances, vertical integration can lower the cost of coordinating transactions between adjacent activities in the design and commercialization of a firm's products.

I and III

Which of the following statements about organizational structures is/are true? I. A functional organization is usually effective at reducing the firm's costs. II. Matrix organizations are most appropriate for firms pursuing rapid growth and cost leadership . Ill. Customer-based organizations emerge when alternative structures cannot meet the full range of distinct client needs. I and II II and III I and III I, II, and III

I and III

Which of the following accurately describes Porter's Five Forces as it pertains to the industry of Coca-Cola and Pepsi from the Cola Wars case study: Rivalry: Constrained competition made the industry for Coca Cola and Pepsi highly profitable. Low threat of entry: Brand equity and scale economies in advertizing created high barriers to entry in this industry. Strong buyers: Bottlers of Coca-Cola and Pepsi could choose which company to work with, which gave them lots of power. Low supplier power: Assuming Coca-Cola and Pepsi's secret ingredients were commodities, those firms have low supplier power. High threat of substitutes: There are many substitutes for Cola, including beer, milk, water, and sports drinks. 1 only

I think all of the above

Which of the following are reasons why Apple entered into the digital music player industry? I. the iPod accounted for a significant portion of Apple's revenues and earnings. II. the iPod created a "halo" effect that helped Apple reposition itself as a successful brand III. Apple's brand and core technologies were resources shared with the iPod business unit IV. Apple shared entrepreneurial management skills with the iPod business unit to compensate for a lack of generic management skills I only I and II I, II, and III all of the above

I, II, and III

A firm is said to be forward vertically integrated when: I. It incorporates multiple activities of the industry's supply chain within its operational boundaries. II. It acquired a company that is more downstream along the supply chain. III. It acquired a company that is more upstream along the supply chain. IV. It takes over a buyer and gets closer to consumers. I and II I, II, and IV I, III, and IV all of the above

I, II, and IV

Based on your knowledge of the Gucci case, which of the following is/are TRUE: I. The key to making strategic repositioning work is that all the various activities have to have a tight "fit". II. Successful repositioning is often a top-down management decisions that requires changing almost everything, from distribution to product development, manufacturing, financial structure, pricing, etc. III. DeSole and Ford were able to enact change in an organization that had performed badly for a long time by slow, careful deliberation and by repositioning Gucci to offer higher value at higher prices. IV. Repositioning requires exploiting your most valuable assets. I only I and III I, II, and III I, II, and IV all of the above

I, II, and IV

Which of the following describes a disadvantage of a differentiation strategy (select all that apply): I. Customers not producers, determine the product's value, which is hard to predict. II. Value is always about "quality". III. Producing high-quality products undermines cost control.

I. Customers not producers, determine the product's value, which is hard to predict. III. Producing high-quality products undermines cost control.

Google hires "learners" through their hiring and recruiting capabilities, and Google also gives 20% time to employees to pursue their own projects on its campus in California. Which of the following statement(s) is/are TRUE? I. All firms would benefit from giving employees 20% time. II. Google's strategy execution includes complementary resources and capabilities that create a source of competitive advantage. III. Google's hiring and recruiting capabilities are more valuable when they complement the firm's other resources and capabilities, including its campus and 20% time. IV. Google has a product advantage, which is the source of its competitive advantage. I only II and III II and IV I, II, and III

II and III

In the field of strategy, an industry's boundaries are determined based on: I. employees switching between companies II. technologically similar products III. highly-correlated stock prices IV. interdependent consumer markets I and III II and IV I, II, and III all of the above

II and IV

According to your knowledge of the Zara case, which of the following best summarizes Exhibit 3 (above) depicting Zara's incurred costs of manufacturing a Large Men's shirt: I. Zara manufactured 60% of its products outside Spain, but it should have produced all of them in Asia to reduce costs. II. About 40% of Zara's products were manufactured in Spain to maintain control over reorders and quick changes in design. III. Zara outsourced the majority of its manufacturing to North Africa and other parts of Europe as part of its "quick response" strategy. IV. Zara's mix of outsourcing and vertical integration, including the specific countries it chose for each activity across the supply chain, helped establish the company's competitive advantage. I only I and II III and IV II, III, and IV all of the above

II, III, and IV

Why do firms go international? I. to exploit country-specific advantages II. to exploit firm-specific advantages III. to expand and grow revenue IV. all of the above I only I and II III only IV

IV all of the above

The following figures (Exhibits 8 & 10) represent Starbucks's international expansion from the 1990s to 2009. Based on our class discussion and your knowledge of the case, which of the statements below is a good explanation of Starbucks's international strategy? Starbucks sustained its competitive advantage due to a superior country-specific advantage. Starbucks sustained its competitive advantage due to a superior firm-specific advantage. In order to achieve sustainable competitive advantage, Starbucks needs to make sure that the superior pace of relative store growth from the early years is maintained through its transnational strategy. In order to achieve sustainable competitive advantage, Starbucks needs to slow its pace of relative store growth from the early years, and open stores with more regularity, through its transnational strategy.

In order to achieve sustainable competitive advantage, Starbucks needs to slow its pace of relative store growth from the early years, and open stores with more regularity, through its transnational strategy

The following is an excerpt from the Marketplace article "Six things you need to know about the possible Hollywood writers strike," by Ben Bergman from April 21st, 2017: "TV and movie writers are worried about the future as their payments go down while the studios' profits go up. Their union, the Writers Guild of America, is in the process of negotiating their new contract; their current contract expires May 1. The Guild is asking members to give authorization for a potential strike. Here's some background on the situation: It seems like there are more TV shows than ever. Why are writers unhappy? Paradoxically, as the number of shows has increased, writers say their earnings have decreased 23 percent in the last two years. The central problem is that TV seasons keep getting shorter. While a season used to have more than 20 episodes, today there may be 10 or fewer. But writers get paid per episode. At the same time, episodes now have much higher production values and take longer to produce. "So whereas I would write 22 episodes and it would take me a year, I have a show on Amazon now where I'm writing eight episodes, and it's going to take me nearly a year, and I'm going to paid eight episodic fees for that," said Chris Keyser, executive producer of "Tyrant" and co-chair of the writer's negotiating committee." Based on this article, what factor is potentially affecting the profitability of firms producing TV and movie studios in Hollywood? Macroeconomic factors Industry factors Firm-specific answers

Industry Factors

Based on the Wal-mart case and your knowledge of isolating mechanisms, which of the following is an example of Causal Ambiguity? Wal-Mart started out in primarily rural locations as a source of its competitive advantage Wal-mart tied up suppliers of low cost inputs, preventing imitation by rivals K-mart tried to copy Wal-mart's price-matching practices and failed.

K-mart tried to copy Wal-mart's price-matching practices and failed.

Which of the following is NOT true about business-level strategic planning? Financial goals myst be aligned with operating goals measured by the business metrics Managers should prioritize short-term goals using SWOT analysis Managers should identify how much macro-economic and industry factors contribute to business performance An effective strategic plan includes a list of strategic initiatives

Managers should prioritize short-term goals using SWOT analysis

Which of the following describes the market position of Gucci in 2000 under De Sole & Tom Ford?

Position B

From the perspective of strategy, all of the following are reasons why regions matter EXCEPT: Regions can provide a pool of workers whose skills are specific to the firm. Regions can contain a strong market of local suppliers. Regions can lead to economies of scale by offering a large customer base. Regions can allow firms to benefit by sharing technological information.

Regions can lead to economies of scale by offering a large customer base.

The following news article is about a bottler for Coca Cola called Coca-Cola Southwest Beverages: Which of the following statements is true about Coca Cola's bottlers. Bottling for Coca-Cola is a very profitable industry. Geography doesn't play much of a role for the bottlers of Coca-Cola. The bottling industry has low threat of entry due to high capital costs and exclusive contracts. The bottling industry has weak suppliers.

The bottling industry has low threat of entry due to high capital costs and exclusive contracts.

Which of the following statements is FALSE? The cost leader in an industry can be identified by finding the company with the lowest prices. The customer, not the seller, determines the value of the product. Market position is determined by the absolute Value-minus-Cost that a firm provides A firm can occupy a superior market position without having the lowest cost or highest value

The cost leader in an industry can be identified by finding the company with the lowest prices.

All of the following are important recent trends related to the increasing frequency of partnering EXCEPT: the growth of technology-intensive industries global integration the diffusion of Japanese partnership practices The decline of outsourcing as accepted practice

The decline of outsourcing as accepted practice

In which of the following situations is a firm most likely to succeed in developing a successful new business venture? The firm believes it can decrease costs by promoting economies of scope between its existing operations and the new venture. The firm is generating significant cash flow and its current industry does not offer significant growth. The venture's returns are expected to be uncorrelated with those of the firm. The firm believes it can increase value by developing a technology that will be used exclusively by the new venture.

The firm believes it can decrease costs by promoting economies of scope between its existing operations and the new venture.

Firms invest in complements to create a "market ecosystem" that drives value up. The benefit of complements are affected by all of the following, EXCEPT: Market power Ease of customer switching across competitors The stage of the industry Ease of unbundling

The stage of the industry

Economies of scope occur when: The average cost of making the product goes up as your firm produces more of it today The average cost of making the product goes down as your firm produces more of it over time The variable cost of making the product is less than its average cost The total cost of producing two products is less than the sum of costs to produce them separately

The total cost of producing two products is less than the sum of costs to produce them separately

The compact digital camera is fading fast. As global shipments plummet—with a consistent 16.7-percent year-on-year sales decrease since 2010—manufacturers are scrambling to adapt to a world where customers value the convenience of smartphones for quick shots they can share on social networks like Facebook and Instagram. The global compact digital camera market may shrink to as little as 9 million units shipped, compared to a unit sales peak in 2010 with over 120 million units shipped. According to this description, what is the main threat to profits in the digital camera industry, and what is the most likely impact of this threat on companies in the industry? Threat: buyer power; Impact: forces firms to increase value and decrease price Threat: substitutes; Impact: forces firms to increase value and decrease price Threat: buyer power; Impact: forces firms to decrease value and increase cost Threat: substitutes; Impact: forces firms to decrease value and increase cost

Threat: substitutes; Impact: forces firms to increase value and decrease price

What is the best reaction in terms of Strategy to the following statement: "A firm generally chooses to expand businesses into countries that are most similar to its home country. This is because a firm is more likely to understand the language, laws, customers, and customer demands of a country similar to its own." True. This is why Starbucks expanded internationally to the UK first. False. As evidence, Starbucks expanded internationally to Japan first. True. Although firms, like Starbucks, can still succeed without following this general trend. False. Starbucks did not take the time to learn about Japanese culture before they expanded there, which explains why Starbucks' stores in Japan are less profitable than its UK & US stores.

True. Although firms, like Starbucks, can still succeed without following this general trend.

"A firm's ability to observe, learn, and adopt innovations developed by other organizations, including sources of technology" refers to which of the following? dynamic capability core rigidity absorptive capacity path dependence

absorptive capacity

The following represents YSL Operating Margins (%) from the Gucci case. 2000 2001 2002 2003 2004 2005 2006 2007 Gucci 27 30 29 28 28 27 29 30 YSL 16 -75 -44 -50 -42 -41 -25 -14 YSL Beaute 8 7 7 3 4 3 5 10 Based on the above margins and your knowledge of the case, which statement(s) best describe(s) Gucci's acquisition of YSL: I. YSL was an unprofitable acquisition. II. It was likely a poor decision to make Tom Ford creative director for both Gucci and YSL. III. There were some synergies in purchasing and advertising between Gucci and YSL, but ultimately these brands competed with on another. I only II only III only all of the above

all of the above

Which of the following are common managerial decision-making biases? escalation of commitment myopia information anchoring all of the above

all of the above

Which of the following are ways to estimate a customer's willingness to pay (value): I. Internal engineering (e.g, direct calculations) II. Customer perceptions (e.g., focus group interviews or surveys) III. Quantitative analysis of product attributes and purchase behavior IV. Conjoint analysis none of the above -- value is subjective. I only II only I, II, and III all of the above

all of the above

Which of the following is a useful question for competitor analysis? What are the key macroeconomic forces that affect profits in the industry? What are the key industry forces (e.g., powerful buyers, strong substitutes...)? What new strategic initiatives and programs have key competitors developed, if any? all of the above

all of the above

Which of the following is NOT a potential disadvantage or challenge associated with partnering? an increase in antitrust scrutiny from regulators a reduction in strategic flexibility an increase in proprietary technology a reduction in organizational identity

an increase in proprietary technology

When managers are unable to identify how much performance is due to individual skill and effort ad how much is due to luck is called: the alignment problem the controllability problem the interdependency problem the matrix form problem

controlability problem

According to the textbook, 3M is a multi-business firm that has successfully developed and exploited a ___________ because it has technological resources and capabilities that serve as a foundation for growth, combined with entrepreneurial skill, which -- together -- helps 3M create economies of scope in developing new businesses. dynamic capability general management skill core competence core element of an activity system

core competence

A nationally segmented industry is one in which: country-specific advantage and firm-specific advantage are both high country-specific advantage is high and firm-specific advantage is low country-specific advantage is low and firm-specific advantage is high country-specific advantage and firm-specific advantage are both low

country-specific advantage and firm-specific advantage are both low

to prevent imitation, Wal-mart managers tied up suppliers to obtain low-cost inputs, which occurs when managers turn external resources into _______________________.

dedicated assets

All of the following are potential contributions a new venture may make to the parent corporation, EXCEPT: repositioning existing businesses growth in corporate revenues and earnings general management skills corporate risk reduction

general management skills

All of the following are generally good options for organizing globally in single-business firms EXCEPT: handling international operations under the marketing division forming a separate international division placing international activities within functional divisions placing functional activities within geographic divisions

handling international operations under the marketing division

Based on your knowledge of the Gucci case, which company's market position corresponds to #6 (highest differentiation, highest costs)? Your choices are the following: Pierre Cardin Chanel Ferragamo Hermes Louis Vuitton Prada

hermes

All of the following are indicators of an attractive market for diversification, EXCEPT: strong market growth large ultimate market size high cost of entry a favorable future industry structure

high cost of entry

When large, dominant firms compete in many product lines across geographies and market segments, and firms innovate in Value and Cost in the same way, and at roughly the same pace, to keep up with competitors, this is called: multipoint competition hypercompetition competition supercompetition

hypercompetition

Based on your knowledge of the Wal-mart case, which of the following is/are TRUE about Wal-mart's isolating mechanisms: I. Because of Wal-mart's breadth of line and brand reputation, customers faced a high cost to search for comparable alternative products sold by rival companies. II. Because of Wal-mart's breadth of line and brand reputation, customers faced a high transition costs in terms of time and gas money to travel to a rival store. III. Because of Wal-mart's breadth of line and brand reputation, it provided higher value than its rivals Target and K-Mart.

idk

McDonald's is in an industry where no country has an advantage over any other country. But, there are some opportunities for firms to develop superior global cost or value drivers. In our Framework for Global Competition, this industry is called: Nationally Segmented Vertically Integrated Across Borders Horizontally Integrated Across Borders Vertically and Horizontally Integrated Across Borders

idk

Target sells its differentiated goods more efficiently than its rivals Wal-mart or Macy's, by having the greatest difference between its gross margin ratio and the SGA ratio -- in other words, Target makes more money on every sales dollar with its "stuck in the middle" strategy. Given Target's performance, which of the following represents a good description of generic strategies? I. Competitive Advantage does not depend on being either a low-cost leader or high-value differentiator. II. What matters most in strategy is that a firm make higher profits than its competitors by maximizing the difference between value it offers to customers and the cost of delivering that value to customers. III. Generic strategies have a strong relationship to economic performance. IV. Generic strategies have no relationship to economic performance

idk

The following is an excerpt from Barron's news article, "Uber Extends Worker Status to Its U.K. Drivers," by Pierre Briançon, updated on March 17, 2021: "Some 70,000 Uber drivers in the U.K. will be entitled to paid vacation and pension benefits as the ride-hailing company agreed to give them the status of workers instead of independent contractors, after losing its final appeal last month in a lawsuit filed by 35 former drivers. The U.K. Supreme Court had ruled last month that Uber drivers had a relationship of 'subordination and dependency' with the company and should be reclassified as workers—a status falling between that of self-employed and full-blown employee. The U.K. is one of Uber's largest foreign markets, accounting for more than 6% of the company's gross bookings. France's highest court last year ruled that Uber drivers were in a 'relationship of permanent legal subordination' with the company and that their independent status was "fictitious." The company's decision will be scrutinized by labor activists in the company's other big European markets, who hope it might serve as precedent. Spain, for one, is already planning legislation to classify gig economy workers as full-blown employees." This international decision in the U.K. follows a ruling last year by a judge in the U.S. State of California, who ruled that Uber and Lyft drivers are employees. An "employment relationship" between Uber or Lyft and its workers would drastically change the planning and decision-making for these firms. According to the U.S. legal system, Uber and Lyft's employees would be required to do which of the following duties, unique to employment status: act in the interests of him or herself, benefiting at the employer's expense disclose critical information relevant to the firm to the employer behave in a socially acceptable, respectful way with the employer none of the above I and II II and III I and III I, II, and III IV

idk

Toni & Guy is a British company that opened its first hair salon for men and women in Clapham, London, in 1963. Today, there are over 485 salons in 48 countries. The first Toni & Guy salon outside of Europe opened in Dallas, Texas. Haircut styles - like fashion or interior design - vary widely by country. Toni & Guy businesses in France can deliver the same service as Toni & Guy businesses in Dallas, Texas, with the same opportunities for cost and value drivers. Also, what Toni & Guy learns about customers in France, does not translate to customers in Japan, the US, or the UK. The minimum efficient scale for hair salons is so low that local firms remain competitive in this industry. This industry can be considered:

idk

When applying Porter's Diamond Model to the high-performance automobile manufacturing industry in Germany, which of the following is evidence of demand conditions: Germany's numerous scientific and engineering universities produce a skilled labor force. The autobahn, which has no speed limit, causes German consumers to look for cars with high performance levels. There is intense rivalry among German auto makers, including Mercedes, BMW, and VW. Germany is known for its steel and iron sector, which are able to provide the quality materials needed to produce vehicles.

idk

Which of the following expected benefits can alleviate antitrust concerns with respect to partnerships: I. an increase in the rate of industry innovation and growth II. an increase in economic growth III. the expectation of continuous new developments of technology for the industry I only I and II I and III all of the above

idk

Why do countries matter for firm Strategy? Select all that apply. National governments frequently intervene in industries to shape the intensity and direction of investment behavior. Nations regulate economic behavior through legal sanctions that affect firm growth and profitability. Nations have unique traits determined by their geography, climate, languages, religions, history, arts, political systems, and social traditions that affect opportunities for growth and profitability of firms. The natural resources associated with a country can create advantages for indigenous firms.

idk

The following is TRUE of Zara "Quick Response" Strategy: it exclusively uses vertical integration as the source of its competitive advantage it exclusively uses outsourcing as the source of its competitive advantage it spans the entire value chain to achieve its competitive advantage it focuses on distribution and delivery for quick response to achieve its competitive advantage

it spans the entire value chain to achieve its competitive advantage

licensing agreement strategic alliance joint venture research contract

lcensing agreement

All of the following are factors determining the power of buyers compared to their suppliers, EXCEPT: Market growth rate Strategic importance of the buyer to the supplier Limit pricing Supplier's need to fill capacity

limit pricing

According to the strategic sourcing framework, partnerships are recommended when the firm's capability to perform the activity compared to others is (a) __________ and the strategic value of an activity is (b) __________. (a) high, (b) high (a) low, (b) high (a) high, (b) low (a) low, (b) low

low, high

To qualify as a "new business" unit, it: must compete in a unique product market must compete in the same industry must develop a strategic plan for its operations that is identical to its parent corporation must be a extension of the existing product line

must compete in a unique product market

For which types of new businesses will the parent corporation's contributions of financial capital be most valuable? smaller units in mature industries larger businesses in mature industries smaller units in growing industries Risk-free businesses in growing industries

smaller units in growing industries

Which of the following represents a key benchmark for setting a firm's financial goals? Choose all that apply. the firm's historical performance the current performance of competitors in the industry the highest performing firm in a different industry A combination of both the firm's historical performance and its competitors' current performance

the firm's historical performance the current performance of competitors in the industry A combination of both the firm's historical performance and its competitors' current performance

When organizing for global competition, which of the following is a unique disadvantage of the geographic structure depicted below. the geographic structure requires extra coordination from shareholders the geographic structure reduces the firm's ability to benefit from economies of scale the geographic structure reduces the firm's ability to benefit from tailoring to local needs the geographic structure does not have any disadvantages

the geographic structure reduces the firm's ability to benefit from economies of scale

The cost of trying to develop a capability in less time than the original firm is called a ______________. An example includes Firm A trying (but failing) to imitate rival Firm B's strong brand image in half the time it took Firm B to build it by doubling Firm A's marketing expenditures. dedicated asset causal ambiguity sunk cost time-compression diseconomy

time-compression diseconomy

The following is a hypothetical scenario. "There are 326 million wireless subscribers in the U.S. But the battle to take business away from the industry's leaders comes down to just 19 million of them. That is about how many wireless subscribers have left V Wireless and A Telecom annually over the past three years. It may seem like a lot, but most of those subscribers just go back and forth between the top carriers. The four national U.S. carriers together added only about a net 3.3 million subscribers last year and V Wireless and A Telecom accounted for all of them. The numbers show the daunting task ahead as the newly revitalized S Company and T Company gear up to take business away from the two companies that dominate the U.S. industry. The third and fourth largest U.S. wireless carriers are now better capitalized, building advanced networks, carrying the iPhone, and launching new service plans under aggressive new managers or owners. But they are taking on entrenched rivals that are doing a better job than ever of holding on to their customers. The bulk of A Telecom and V Wireless' customers are locked up in two-year contracts with penalties if they leave early. Large majorities are also on family or business plans, which tend to be more complex and harder to leave. Last year, the average percentage of contract customers to leave the carriers each month—a figure the industry calls "churn"—was just 0.91% for V Wireless and 1.08% for A Telecom, according to UBS. Subscribers occasionally try to check out, but they almost never leave." Question: Which of the following isolating mechanisms best describes how V Wireless and A Telecom are maintaining their market positions? Learning costs Transition costs Causal ambiguity Sunk costs

transition costs

How would a supplier firm reduce the power of one of its buyers? increase the percentage of the firm's product sold to the buyer focus on supplying commodity products the venture's returns are expected to be uncorrelated with those of the firm vertically integrate into the buyer's industry

vertically integrate into the buyer's industry