428 mgmnt

Which of the following statements is true of strategy?

Actions that allow a firm to address a competitive challenge are strategy.

Which of the following statements is true of the Level-5 leadership pyramid?

Each level of leadership builds upon the previous one in the pyramid.

Which of the following statements does the upper-echelons theory support?

Executives interpret situations through the lens of their unique perspectives, shaped by personal circumstances, values, and experiences.

Which of the following statements best supports the fact that even during a period of low demand in the U.S. automotive industry, excess capacity remained?

GM and Chrysler, despite their bankruptcy, restructured instead of exiting the industry.

Genie Software Inc. has been operating in the country of Jamtland for almost a decade. The nation is currently experiencing an economic downturn. Which of the following is the most likely benefit of this economic condition for Genie Software Inc.?

Genie will have better access to highly skilled human capital at a lower cost.

Which of the following questions would a firm's business strategy ideally answer?

How should we compete?

Revved Rider Inc., a motorcycle company, is the market leader due to its superior engine technology and service orientation. These unique qualities have helped the company generate revenues that are consistently higher than other firms in the same industry. Which of the following can be concluded about Revved Rider Inc. from this scenario?

It has a competitive advantage over the other firms.

Which of the following statements is true of an oligopoly?

It is often analyzed using game theory.

Quick Eats is a fast-food restaurant that has recently entered the hospitality industry. Since most of its competitors are pursuing a low-cost position and doing well, Quick Eats also wants to adopt the same strategy. Which of the following will be a likely implication of this decision?

Quick Eats will face low profit potential.

_____ is best described as executives' use of power and influence to direct the activities of others when pursuing an organization's goals.

Strategic leadership

In which of the following cases was a company put at a major competitive disadvantage?

The Environmental Protection Agency (EPA) banned BP from any new contracts with the U.S. government.

If a company chooses to keep its vision customer-oriented rather than product-oriented, what will be the implication of that decision?

The company will tend to be more flexible when adapting to changing environments.

Which of the following statements is true of customer-oriented visions?

They define a business in terms of providing solutions to people's needs.

Why are black swan events such as accounting scandals and the global financial crisis perceived as caused by cheap credit and subprime mortgages offered by financial institutions, bad for business?

They erode the implicit trust between the corporate world and society.

Organizational core values are the answer to which of the following questions?

What commitments do we make to act both legally and ethically?

Which of the following firms most likely has the lowest bargaining power as a buyer?

a cell phone company that requires highly customized software for its phones

A diagnosis of the competitive challenge, an element of a good strategy, is primarily accomplished through strategy

analysis

Which of the following groups is most likely to be considered a firm's internal stakeholder?

board members

How has Walmart staked out a unique strategic position?

by cutting costs to offer lower prices than competitors.

Strategic group mapping establishes that

competitive rivalry is strongest between firms that are within the same strategic group.

Which of the following is a feature of a fragmented industry?

consists of many small firms

According to the Level-5 leadership pyramid, the Level 2 manager is a(n)

contributing team member

Which of these is a way to reconfigure a value chain?

entering an industry by offering sporting events on streaming video when competitors are offering them through cable hookups

Product-oriented vision statements provide managers with

goals to improve service

The greater the difference between value creation and cost, the

greater a firm's economic contribution.

A firm's _____ is likely to fall by the wayside because of unpredictable events and turn into unrealized strategy.

intended strategy

A firm is likely to have a competitive advantage when it

provides services that consumers will value more than those of its rivals.

Which of the following has contributed to Tesla's competitive advantage in terms of stock appreciation?

reinvesting profits to continually design and produce better electric vehicles

The annual net profit after taxes for RSL Corp., a multinational conglomerate, is $5.5 billion. As legal owners, which of the following stakeholder groups has the most legitimate claim on this profit?

shareholders

Which of the following actions of an automobile firm will be considered as a strategic commitment?

the firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future

When a firm integrates the competitive strategies of cost-leadership and differentiation, it will most likely result in

trade-offs that work against each other.

A company's vision primarily states

what the company wants to ultimately accomplish.

According to the upper-echelons theory,

organizational outcomes reflect the values of the top management team.

Which of the following statements about the five forces in the U.S. airline industry is true?

The competitive forces taken together are quite unfavorable for generating a profit potential in the airline industry.

Incumbent firms can benefit from several important sources of entry barriers. Economies of scale are one such source. Which of the following is an implication of economies of scale for incumbent firms?

They can demand better terms from their suppliers.

How do complements affect a primary product or service?

They increase the demand for the primary product.

A consolidated industry turns into a fragmented industry when

restrictive government policies are introduced in the industry.

Within the context of strategic management it is important to understand that black swan events in the past have demonstrated that

stakeholders can affect or be affected by a firm's actions.

Generally speaking, which of these situations is likely to lead to greater profits?

an industry with fewer but larger competitors

In the 1980s, Japanese competitors brought better-quality chips to the market at lower cost, threatening Intel Corporation's position and strategic plan regarding the production of DRAM (dynamic random-access memory) chips. When the functional managers at Intel came up with the simple rule of producing whichever product delivered the higher margin, the front-line managers shifted Intel's production capacity away from the lower-margin DRAM business to the higher-margin semiconductor business. This _____ emerged as a consequence of the firm's resource allocation process.

bottom-up strategy

The metaphor of a black swan best applies to

events that are considered highly unexpected and highly impactful when they do occur.

The relative bargaining power of suppliers is most likely low when

incumbent firms face low switching costs when changing suppliers.

Which of the following is a stakeholder attribute that managers should consider at every step in a stakeholder impact analysis?

legitimacy

Which of the following real-world examples best supports the statement that strategic commitments to a specific industry may be the result of political rather than economic considerations?

A number of European governments created Airbus through direct subsidies to provide a countervailing power to Boeing.

Which of the following statements accurately brings out the difference between an organization's vision and mission?

Vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished.

Which of the following is a philanthropic responsibility of a firm?

exhibiting corporate citizenship

Widgets Inc. is a vendor who supplies machine parts to an appliance manufacturing company. In return, Widgets Inc. relies on the company for its revenue and is affected by any decisions taken by the company. In this scenario, Widgets Inc. is a(n) _____ for the appliance manufacturing company.

external stakeholder

Qwik Process Inc. is a company that supplies microprocessors to Nuevono Inc., a computer hardware company. When Nuevono Inc. demands lower prices for the microprocessors, Qwik Process Inc. makes it clear that it would profit more from launching its own brand of laptops and desktops in the market. Fearing the competition it would then face from Qwik Process Inc., Nuevono Inc. decides to buy the microprocessors at the quoted price itself. In this scenario, Qwik Process Inc., as a supplier, has exercised its bargaining power by threatening to

forward integrate.

EZ Electronics Inc., Neo Digital Inc., and Techno Products Corp. are all companies that manufacture and sell consumer electronics. They procure their component parts from a similar set of suppliers in China and sell the final product to customers with similar needs. Thus, the three companies together are a part of a(n)

industry.

The amount that savers are paid for use of their money and the amount that borrowers pay for that use is best described as a(n)

interest rate.

Larry has been recently promoted to the position of a team lead at an insurance company. This promotion was based on his boss's assessment that Larry is capable of conveying the company's vision and mission to groups. As a result, he can guide groups to superior performance. From this scenario, we can say that Larry is currently at _____ of the Level-5 leadership pyramid.

level 4

An organization's _____ describes what the organization actually does—the products and services it plans to provide, and the markets in which it will compete.

mission

In the restaurant industry, a large number of restaurants cater to similar customer needs. However, each restaurant makes its product unique by offering a different cuisine, a different ambience, organic ingredients, or different services like home delivery. This differentiation allows each restaurant to set its own prices. Thus, the restaurant industry best illustrates a(n)

monopolistically competitive structure.

Evaluating the data collected from environmental analysis, the corporate executives of F&S Pharma Inc. realized that it was the right time to expand the business. The company's vision was accordingly adjusted from "To Be the Best in the Pharmaceutical Industry" to "To Make Good Health Accessible to Everyone around the Globe." To support the new vision, the executives decided that the company would first enter the Asian market where its growth potential would be huge. To further support these decisions, the general managers of different SBUs and the functional managers formulated their own strategies. Which of the following approaches to the development of strategy does this best illustrate?

top-down strategic planning

Which of the following statements will effectively guide a strategist?

The principles of strategic management can be applied universally to all organizations.

Which of the following statements related to a firm's stakeholders is not true?

While external stakeholders are those who make contributions toward the firm, internal stakeholders are those who reap all the benefits.

The board of directors of Best Digital Inc., a company that has a large product mix, has decided to get actively involved in research and development for the next three financial years. Budget for each business unit under the company will be allocated from the headquarters in proportion to its previous performance. The board has also decided to liquidate those units that have failed to perform so far. Which of the following strategies does this scenario best illustrate?

corporate strategy

Owners of coffee plantations in the country of Jabatina grow their own coffee beans and supply them to various stores and restaurants all over the country. There are many plantation owners supplying to a huge number of companies, and they are typically unable to differentiate their products from one another. They also do not have the power to fix their own prices in the industry. In addition, these suppliers can only achieve competitive parity and not a competitive advantage. Thus, the coffee bean industry in Jabatina best illustrates a(n)___ structure.

perfectly competitive

Restrictions imposed by the government, such as export quotas on certain products, are a part of the _______ environment of the PESTEL framework.

political

Which of the following groups will not be considered a company's internal stakeholder?

suppliers

Which of the following does a firm possess when it can outperform other firms in the same industry or the industry average over a prolonged period of time?

sustainable competitive advantage