WPC 480 Midterm

Which of the following best represents a customer-oriented vision statement?

"We provide solutions to professional communication needs."

While Sesmic Inc. operates in a monopolistically competitive industry, Energy 4 All Inc. operates in a monopoly. Keeping this information in mind, which of the following statements is most likely true?

The threat of new entrants will be higher for Sesmic than for Energy 4 All

Most consumers and investors today want the firms they do business with to look beyond just the profit motive. In fact, they want firms that behave legally and ethically while also giving back to their communities via philanthropic activities. The framework that attempts to reconcile these wants is known as

corporate social responsibility

When a firm combines experience-based learning and process innovation, the firm

jumps to a steeper learning curve.

Core competencies are derived from the combination of

key strategic resources and a firm's capabilities.

TalkaLot Corp. incurs a cost of $350 to produce one unit of a cell phone. The company's management has priced the product at $600 in the market. Considering the technological advancement of the cell phone, customers perceive its value to be around $800. What is the economic value created in this scenario?

($800 - $600) + ($600 - $350) = $450.

Internal Stakeholders

1. employees 2. stockholders 3. board members

Which of the following statements is true of accounting data?

Accounting data are historical data and thus backward-looking.

Which of the following factors most contributes to the U.S. automotive industry being characterized by high entry barriers?

Car manufacturers require large-scale production in order to be cost-competitive.

Sarah paid $900 for a camera that she thought was worth $1100 for all the features included in it. For the consumer electronics firm selling the camera, however, the cost of producing the camera was only $350. What is the consumer surplus in this scenario?

Consumer surplus is the difference between the value a consumer attaches to a good or service (V), and what he or she pays for it (P), or (V - P), that is, $1100 - $900 = $200.

A decision tool with which managers can recognize, assess, and address the needs of different stakeholders, allowing the firm to achieve competitive advantage while acting as a good corporate citizen

Stakeholder Impact Analysis

Organizational values help people make choices that are ethical and company-goal-oriented. These values answer which strategic management question?

How do we accomplish our goals in the organization?

Beats Electronics has been able to outperform Audio-Technica, Bose, JBL, Skullcandy, Sennheiser, and Sony in the high-end, premium headphone market. Which of the following statements accurately explains one of the main reasons for the success of Beats?

It created a perception that owning its products was cool.

How is a cost-leader protected from threats from powerful suppliers?

It is more able to absorb price increases through accepting lower profit margins.

How does causal ambiguity act as an isolating mechanism for organizations?

It makes it difficult for the competitors to understand why a company has been so successful.

Jonathan is the owner of a landscaping company that caters to a very wealthy clientele. His company has struggled to differentiate itself from the other high-end landscapers in the area, but because he has hired several expensive but highly qualified team members, Jonathan is unable to shift to a cost-leadership strategy. Which strategy is most likely to achieve a competitive advantage?

Narrow the scope of competition and focus on unique features such as the use of organic materials.

Which of the following tasks in the AFI strategy framework involves evaluating the internal and external environments in which a firm operates?

analysis

Corporate executives at Fly High Inc. decide to compete in the remote model airplane industry by making the largest model planes available. By doing this, they completed part of their ________ strategy.

business

All of the following are external stakeholders except which of the following?

competitors

By selling a tablet at $1,000 for which consumers are willing to pay up to $1,200, a consumer electronics firm makes a profit of $400 per unit. In this scenario, the amount $600, that is ($1200 - $1000) + $400, is the

economic value created.

Food Tiger Inc. is a large chain of hypermarkets. It has cost benefits due to its extensive operation. The company's marketing and sales, logistics, administrative, and other such related costs get divided between a large number of product units stocked in its stores. This makes it difficult for smaller retail stores and supermarkets to compete against Food Tiger's low prices. Thus, Food Tiger has a competitive advantage due to its

economies of scale.

Green and Good Inc., a multinational company, relies on its media partner OmniSignal to regularly advertise its offers, sales, and new products. OmniSignal is invested in this relationship because it generates most of its revenue from advertising Green and Good's products. In this scenario, OmniSignal is Green and Good Inc.'s

external stakeholder.

LightningDrive is a leading automobile company. The company has been able to sustain its competitive advantage primarily due to its high-quality and efficient electric motors. Most of its competitors have failed to develop similar electric motors at a reasonable price. Which of the following resource attributes listed in the VRIO framework has helped LightningDrive sustain its competitive advantage?

high costs involved in imitation

After a firm has identified its key stakeholders in stakeholder impact analysis, the immediate next step is to

identify stakeholders' interests and claims.

In which of the following situations is a company that exists in the telecommunications industry most likely to face the highest threat of entry?

if the industry has recently become deregulated

The balanced-scorecard framework is a tool for strategy ________, not ________.

implementation; formulation

Due to several black swan events in the past, the

implicit trust relationship between the corporate world and society at large has deteriorated.

Which of the following three important stakeholder attributes should managers pay special close attention to in order to better understand stakeholder impact analysis?

power, legitimacy, and urgency

When young start-up entrepreneurs make claims like, "We will be the Uber of X, where X is any other category than ride hailing" or "We will be the Airbnb of Y, where Y is any other category than hospitality services" they are best illustrating which of the following cognitive biases?

representativeness bias

Dora's Supplies manufactures medical devices. The firm's profitability depends on several variables that are subject to occasional change, including the cost of parts and labor, changes in medical practices, and the price of oil used in both manufacturing and shipping. To account for the potential impact of changes to any of these variables, Dora's Supplies managers should implement a(n) ________ approach.

scenario planning

TopHat & Scarfs Inc., an apparel company, recently moved locations to be closer to their main manufacturer in Ohio. The move required that they upgrade their legacy ordering system with their manufactures ordering system which should facilitate their supply chain to gain future efficiencies and reap future savings. However, the new system costs $75,000.00 and will require a significant amount of time to train their employees. This best represents a significant increase in their

switching cost

Which of the following best describes a strategic tradeoff?

the tension between value creation and the pressure to keep costs in check

The internet service provider industry in the country of Wakanda is an industry characterized by the presence of strong network effects, high brand loyalty, high economies of scale, and proprietary technology among incumbent firms. Thus, in the internet service provider industry, the

threat of new entrants is most likely low

CarTsar Inc. is a manufacturer of automobile parts, which it sells to retail auto supply stores. Its core competencies include superior design and engineering capabilities, as well as a highly integrated and efficient supply chain. To sustain its competitive advantage, CarTsar should first

upgrade its engineering department and improve its supply chain.

Which of the following terms describes the guiding policy to address the competitive challenge, and uses corporate- and business-level strategy?

formulation