BUS 498 Exam 1 Review

According to the Level-5 Pyramid, a Level-4 leader is also referred to as a(n) executive contributing team member effective leader highly capable individual

effective leader

Place the three frameworks used in industry analysis in the order they should be used, with the first at the top.

1. PESTEL 2. Porters five forces 3. Strategic group mapping

True or false: Top-down strategic planning is most effective when the environment is constantly changing.

False

______ strategy answers questions regarding how to implement the business strategy. Multiple choice question. Functional Corporate Business

Functional

What is the overall purpose of strategic management? Calculate parity performance measures Respond to globalization Gain competitive advantage Create competitive transparency Perform risk analysis

Gain competitive advantage

Which of the following identifies the resources that can lead to a competitive advantage? Multiple choice question. resource heterogeneity VRIO framework PESTEL value chain

VRIO framework

VRIO Framework

Value, Rarity, Imitability, Organization used for competitive advantage analysis

Mission vs value:

Mission: Defines how the vision is accomplished, the products and services it will provide, the markets in which it will compete, strategic commitments/actions Values: guide behavior of all employees at all levels, ethical standards and norms, company culture, conflict resolution

According to the pyramid of five levels of strategic leadership, a Level-1 leader typically shows which capability?

Offers helpful and effective input.

illusion of control

Our tendency to overestimate our ability to control events.

______ describes a process in which the options one faces in the current situation are limited by decisions made in the past. Multiple choice question. Resource allocation VRIO framework Social complexity Path dependence

Path dependence

What is the overall purpose of a firm's strategy? Multiple choice question. Perform better than other companies in the same industry. Sell all existing inventory of a given product. Determine demand for new product ideas. Generate significant interest from foreign investors.

Perform better than other companies in the same industry.

What must a firm do after diagnosing its specific competitive challenge? Multiple choice question. Create an effective guiding policy Collect investments from stockholders Identify its primary competitors Implement a set of coherent actions

Create an effective guiding policy

Which one of the following is a capability a Level-3 leader typically exhibits? Does things right. Does the right things. Offers a convincing vision and mission. Creates long lasting greatness.

Does the right things.

According to the resource-based model, a firm is assumed to be a unique bundle of resources, capabilities, and competencies. True false question.

True

Which statement about strategies is true? Multiple choice question. Statements of desire typically address economic fundamentals. Vision and mission statements cannot lay the foundation for good strategies. A statement of desire on its own often leads to goal conflict. "We will be the best!" is an example of a strategy.

A statement of desire on its own often leads to goal conflict.

Three traditional frameworks to measure and assess firm performance:

A) Accounting profitability. B) Shareholder value creation. c) Economic value creation. These three performance dimensions generally correlate over time. Two integrative frameworks, combining quantitative data with qualitative assessments: •Balanced scorecard. •Triple bottom line.

Accounting profitability

Accurately assesses firm performance Compares firm performance to competitors / industry average Available through: •Standardized accounting metrics (GAAP, FASB) •Form 10-K statements •Profitability ratios •Return on invested capital (ROIC), return on equity (ROE), return on assets (ROA), and return on revenue (ROR)

A-F-I Framework

Analysis, Formulation, Implementation

______ has a greater chance of arising from intangible resources than from tangible resources. Multiple choice question. Critical assumptions Resource homogeneity Resource mobility Competitive advantage

Competitive advantage

Escalating Commitment

Continuing to support a project when it is showing signs that it may not succeed.

Which of the following is not necessarily a capability a Level-1 leader typically exhibits? Contributes through skills. Contributes through collaboration. Contributes through motivation. Contributes through knowledge.

Contributes through collaboration.

PESTEL Analysis

Political Economic Social Technological Environmental Legal

Two Types of Vision Statements:

Product-oriented, Customer-oriented

Which of the following is true according to the assumption of resource heterogeneity? Multiple choice question. Resource bundles vary from company to company. Firm resource differences tend to last for a long time. Companies should focus on duplicating the resources bundles of successful firms. Each firm deals with a unique set of external influences.

Resource bundles vary from company to company.

hich of the following is true according to the assumption of resource heterogeneity? Multiple choice question. Companies should focus on duplicating the resources bundles of successful firms. Firm resource differences tend to last for a long time. Resource bundles vary from company to company. Each firm deals with a unique set of external influences.

Resource bundles vary from company to company.

Where Does Competitive Advantage Come From?

Resources: Any assets that a firm can draw on when formulating and implementing a strategy. Examples: cash, buildings, machinery, or intellectual property. Capabilities: Organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically. They find their expression in a company's structure, routines, and culture. Activities: Distinct and fine-grained business processes that enable firms to add incremental value by transforming inputs into goods and services. Examples include: order taking, the physical delivery of products, or invoicing customers.

A standalone division of a larger conglomerate, with its own profit-and-loss responsibilities, is called a(n) Blank______. Multiple choice question. franchise division SBU department

SBU

One of the most popular tools used by firms to evaluate their current situation and future prospects is the Blank______. Multiple choice question. dynamic capabilities perspective SWOT analysis VRIO framework value chain analysis

SWOT analysis

Shareholder Value Creation - Definitions

Shareholders •Own shares of stock, are legal owners of public companies. Risk Capital: •Money provided for an equity share. •Cannot be recovered if a firm goes bankrupt. Total Return to Shareholders: •Stock price appreciation + dividends. Market Capitalization: •Number of outstanding shares x share price.

The Blank______ is a theoretical model that explains and predicts what resource attributes underpin competitive advantage. It identifies which types of resources are key to firm performance. Multiple choice question. VRIO framework dynamic capabilities perspective SWOT analysis value chain

VRIO framework

What is strategy? The set of actions a firm takes to achieve a competitive advantage a sustainable and dominant market share a decision based on internal situational analysis a decision based on external situational analysis

The set of actions a firm takes to achieve a competitive advantage

What is strategic leadership? The ability of executives to consider the concerns of the organization and coordinate and integrate the steps necessary to get work done An executive's ability to get employees to agree to any plan without critically evaluating or challenging the executive's views and assumptions The use of influence and power by executives to direct the activities of individuals while pursuing an organization's goals A belief that an executive is capable of producing a plan that will address any business scenario

The use of influence and power by executives to direct the activities of individuals while pursuing an organization's goals

What distinguishes a Level-5 leader from other levels of leaders? Multiple choice question. They flourish in corporations, but not as entrepreneurs. They create enduring greatness. They are better educated than others. They are rarely wrong.

They create enduring greatness.

A good strategy consists of three elements. The first element is accomplished through analysis of the firm's external and internal environments. We also call this Blank______.

a diagnosis of the competitive advantage

According to Michael Porter, the profit potential of an industry is Blank______. Multiple choice question. a function of five forces related to competition largely random similar for all service industries entirely determined by industry-specific factors

a function of five forces related to competition

A group of companies that deal with more or less the same set of suppliers and buyers make up Blank______. Multiple choice question. a state a multi-environment a business group an industry

an industry

Which of the following elements comprise strategic management?

analysis implementation formulation

"Time compression diseconomies" refers to the concept that Blank______. Multiple choice question. attempting to get a good outcome in less time tends to be ineffective some phenomena do not have a clear cause or effect options one faces in the current situation are limited by past decisions barriers to imitation may prevent other firms from competing away a firm's competitive advantage

attempting to get a good outcome in less time tends to be ineffective

Time compression diseconomies occur when a firm Blank______. Multiple choice question. uses automation that slows the rate at which equipment operators need to make decisions tries to shorten the accounting period for production units mismatches labor and R&D resources attempts to reach an outcome in a reduced amount of time

attempts to reach an outcome in a reduced amount of time

According to the PESTEL model, which of the following are kinds of forces that exist in the general external environment?

ecological economic technological

Walmart producing private-label brands, such as Equate health and beauty items and Parent's choice baby products, is an example of Blank______. Multiple choice question. skip-hop integration backward integration horizontal integration forward integration

backward integration

When a buyer moves upstream in the industry value chain, into the suppliers' business, Blank______ occurs. Multiple choice question. threat of substitutes forward integration backward integration entry barriers rivalry of existing competitors

backward integration

Isolating mechanisms are considered to be Blank______. Multiple choice question. barriers to entry something that weakens the industry ways to wipe away a competitive advantage

barriers to imitation

Which strategy addresses the question of how to compete? functional investor business corporate

business

In the strategy process, questions concerning WHERE to compete, such as the industry or market, is referred to as implementation business corporate functional

corporate

The vision is ______________ oriented.

customer

Through use of the PESTEL model, firms are able to do which of the following?

evaluate external trends monitor external factors

Resource Blank______ and resource Blank______ are the key assumptions behind the resource-based model of the firm. Multiple choice question. heterogeneity; immobility heterogeneity; mobility homogeneity; mobility homogeneity; immobility

heterogeneity; immobility

When suppliers offer products that are differentiated, the power of suppliers is Blank______. Multiple choice question. insignificant low moderate high

high

SWOT analysis

identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)

A competitive advantage Blank______. Multiple choice question. is assessed relative to other competitors in the industry is based on the return of invested capital over a 15-year period takes into consideration globalization and rival factors places a firm at a disadvantage in regards to its ROI

is assessed relative to other competitors in the industry

Which of the following tend to result from strong competitive rivalry? Multiple choice question. industry-wide price increases a reduction in the threat of substitutes less product differentiation limits to the industry's profit potential

limits to the industry's profit potential

Which of the following are employed as nonmarket strategies to influence government bodies?

litigation lobbying public relations

The threat of entry is high when capital requirements are ____________________ in comparison to the expected returns.

low

The stronger the five forces in Porter's model, the Blank______ the industry's profit potential. Multiple choice question. stronger less differentiated higher lower

lower

Top-down strategy is derived from Blank______. Multiple choice question. military strategy scenario planning planned emergence strategy representational political systems

military strategy

What term describes the positive effect that one user of a product or service has on the value of that product or service for other users? user effect mass effect multiplicity effect network effect

network effect

In order to influence changes in their political environment, firms pursue Blank______. Multiple choice question. nonmarket strategies market strategies revolutionary change constitutional amendments

nonmarket strategies

Although the five forces model is useful in understanding an industry's profit potential, it provides only a Blank______. Multiple choice question. dynamic view of a moving target point-in-time snapshot of a moving target point-in-time snapshot of static industries fixed view of a static competitive market

point-in-time snapshot of a moving target

Three stakeholder attributes:

power, legitimacy, urgency

Marketing, sales, and distribution are Blank______ activities in a firm's value chain. Multiple choice question. primary secondary ambiguous support

primary

While the ___________clarifies a firm's core competencies, the____________ helps leaders understand how competitive advantage arises from the firm's unique activities. Multiple choice question. resource-based view; value chain perspective value chain perspective; resource-based view upper-echelons theory; value chain perspective resource-based view; upper-echelons theory

resource-based view; value chain perspective

The core competencies of a business are generated by the interaction of Blank______. Multiple choice question. capabilities and management ownership and management resources and capabilities resources and ownership

resources and capabilities

Price discounts, frequent new product releases with minor modifications, and intense promotional campaigns are all tactics indicative of an industry with Blank______ growth. Multiple choice question. exponential fast and positive stable slow or negative

slow or negative

The interaction of the many individual systems in the operation of a company often leads to causal ambiguity because of Blank______. Multiple choice question. social complexity path dependence isolating mechanisms intangible resources

social complexity

A(n) __________________ group is a set of companies within a specific industry that seek to achieve competitive advantage in similar ways.

strategic

Effective guiding policy is supported by and stays consistent through the use of Blank______. Multiple choice question. strategic commitments trade-offs social responsibilities grandiose statements

strategic commitments

What is the primary concern of functional strategy? Multiple choice question. cost analysis marketing research integration strategy implementation

strategy implementation

Unlike capabilities, resources can be both Blank______. Multiple choice question. difficult to access and inexpensive tangible and intangible easy to access and useful tangible and expensive

tangible and intangible

Which of the following is the conceptual framework developed by Jim Collins that describes the progression of leadership through distinct, sequential levels? Multiple choice question. the leadership sequential pentagon the Five-step leadership ladder the 4-level leadership ranking the Level-5 leadership pyramid

the Level-5 leadership pyramid

In performing a SWOT analysis to generate insights from external and internal analysis, internal strengths and weaknesses can be determined by applying __________ and external strengths can be evaluated in part by applying __________. Multiple choice question. PESTEL; the VRIO framework the VRIO framework; PESTEL Porter's five forces; PESTEL Porter's five forces: the VRIO framework

the VRIO framework; PESTEL

Which of the following indicates that investors expect future growth for Tesla? Multiple choice question. the lack of a defined competitive challenge the firm's philanthropic efforts the increasing value of the company's stock the large upfront investment Tesla had to make

the increasing value of the company's stock

Which of the following is not considered an isolating mechanism? Multiple choice question. causal ambiguity social complexity path dependency better expectations of future resource value uncertainty about future resource value

uncertainty about future resource value

According to the _______________, effective leadership is the outcome of certain intrinsic talents as well as education. Multiple choice question. leadership pyramid strategic formulation upper-echelons theory strategic management process

upper-echelons theory

The Blank______ describes the internal activities a firm engages in when transforming inputs into outputs. Multiple choice question. supply chain value chain complementary chain primary chain

value chain

Which of the following terms best describes an organization's primary objective and what it ultimately wants to accomplish?

vision

steps of five forces model

•Define the relevant industry. •Identify key players in each of the five forces and attempt to group them into different categories. •Determine the underlying drivers of each force. •What is the industry's profit potential? •How are the underlying drivers likely to change going forward and what can the firm do about it?