Capstone Quizzes 1-3

Which of the following capabilities meets the criteria for being a core competency, in that it is rare, valuable, costly to imitate, and nonsubstitutable? a. A company history and brand b. The human resources function c. The CEO d. A manufacturing facilitly

a. A company history and brand

Which of the following represents a product market stakeholder? a. A local pipefitters union dealing with a plumbing contractor b. A store manager of a retail chain c. A member of an ownership family in a privately-owned company d. A private equity firm investing in a biomedical firm

a. A local pipefitters union dealing with a plumbing contractor

Which of the following could be a part of the analysis stage of the strategic management process? a. A review of a company's competitive landscape, identifying competitors, naming their differentiations, and detailing a profile of those competitors' customers b. The collection of financial data used to track the success of the strategic plans the company is pursuing c. A mission and vision task force developing these foundational statements for the company d. The selection of strategies the company will pursue to achieve its financial goals and satisfy its shareholders

a. A review of a company's competitive landscape, identifying competitors, naming their differentiations, and detailing a profile of those competitors' customers

You are hired as a strategic analyst for a Fortune 500 company. Your first task is to develop a competitive intelligence report to find key insights on the rivals' latest actions, current capabilities, and potential future actions. Being new to this type of report and the ethical protocols, what should be your first action? a. Contact the Strategy and Competitive Intelligence Professionals association. b. Analyze the publicly released financial records from six months ago. c. Infiltrate the competitors' headquarters and plant devices to receive information. d. Call the competitors' CEO for an interview.

a. Contact the Strategy and Competitive Intelligence Professionals association.

A CEO is in an argument with his board of directors over the direction of the software company he is leading. The CEO wants to branch out and take advantage of its competencies and capabilities to pursue opportunities enabled by new technology that are forecasted to be very profitable. However, these activities are not what the company is used to, and it would have to develop hardware alongside its specialty in software. The board is arguing that the company is a software company and should remain a software company. Which of the following concepts must the CEO overcome? a. Core rigidity b. Core capabilities c. Resources d. Strategic flexibility

a. Core rigidity

In an external environmental analysis, there are two important elements that need to be identified. What are those two elements? a. Opportunities and threats b. Opportunities and weaknesses c. Threats and strengths d. Strengths and weaknesses

a. Opportunities and threats

What are the possible repercussions of a company that performs unethically in order to receive competitive intelligence to gain an advantage? a. No threat, as unethical actions will be kept secret b. Possible jail time or fines, but not always c. Significant prison sentences d. No threat of legal action, as unethical actions are not necessarily illegal

b. Possible jail time or fines, but not always

Which of the following is an example of the mobility of strategies and resources across firms in the mobile network industry, one of the assumptions of the industrial organization (I/O) model of above-average returns? a. Verizon utilizes its high capital availability to invest in a higher quantity of cell towers to achieve a broad geographic network, serving both urban and rural areas. b. The spread of 4G technology between Verizon, AT&T, and Sprint makes the high-speed network available to nearly all mobile phone customers. c. A high-level engineer from AT&T is prevented from working for Verizon for five years by a non-compete agreement. d. Sprint utilizes an innovative marketing strategy to illustrate its price competitiveness compared to Verizon and AT&T.

b. The spread of 4G technology between Verizon, AT&T, and Sprint makes the high-speed network available to nearly all mobile phone customers.

In 2011, Apple and Samsung were in a legal battle over patenting. Apple and Samsung mutually accused each other of infringing on intellectual property, and each took action legally. Why would both parties want to spend the time and resources to reclaim their intellectual property? a. To ruin the reputation of the other company b. To neutralize a threat that could hinder strategic competitiveness c. To receive compensation, as both companies were struggling financially d. To distract the competition and hopefully gain a competitive edge in the meantime

b. To neutralize a threat that could hinder strategic competitiveness

Strategic groups exist because: a. industries are one-dimensional, and all businesses within an industry utilize the same resources and same strategies to achieve their goals. b. companies within the same industry may position themselves differently regarding distribution channels, market segments, and other differentiators, and affects their strategies. c. government regulators have different rules for companies based on the size of the company, geographic headquarters, and number of employees. d. customers want variety in the products and services they select, and different brands can serve customers' needs differently.

b. companies within the same industry may position themselves differently regarding distribution channels, market segments, and other differentiators, and affects their strategies.

An industrial fabrication firm has purchased a facility capable of housing large-scale projects—as long as 120 feet. The firm could develop this tangible resource into a capability by: a. selling the building to its customers for them to use for their projects. b. employing engineers who can design large projects and welders who have expertise in these projects. c. purchasing additional buildings of similar size across the country. d. buying raw metals and shipping them to the facility.

b. employing engineers who can design large projects and welders who have expertise in these projects.

The strategic management process is the: a. analysis of internal and external forces at work on a company that may prevent it from achieving average returns. b. way that businesses formulate initiatives to create superior value for customers, then implement those initiatives to out-perform competitors. c. utilization of the resource-based model of above-average returns to identify the internal resources a company should leverage to achieve strategic competitiveness. d. identification of the industry in which a company should compete due to the attractiveness of that industry's profitability.

b. way that businesses formulate initiatives to create superior value for customers, then implement those initiatives to out-perform competitors.

An industrial tool manufacturer relies on a particular distributor network. This distributor network has the largest online outlet and store network, and its product lines are aimed at construction workers. The distributor network is seeking a manufacturer to provide it with private-label products, as it has decided to offer only its own product line in this category of industrial tools. Now, the industrial tool company must decide whether to agree to this proposition or lose this network as a customer. This is an example of which of the competitive forces at play in this industry? a. Rivalry among competing firms b. Bargaining power of suppliers c. Bargaining power of buyers d. Industry competitive structure

c. Bargaining power of buyers

Apple, a leader in mobile technology products, wasn't always focused on mobile technology. In 2007, the company changed its name from Apple Computers to Apple Inc. This change was indicative of a shift in the industry. Apple began introducing iPods, iPhones, iPads, iTunes, and the App Store. Apple recognized its core competencies in hardware design and software engineering should serve as the foundation of its future strategy. Which of the following tools did Apple use to determine its competitive advantage? a. Industry analysis b. External environmental analysis c. Internal analysis d. Competitor analysis

c. Internal analysis

Which of the following would be considered an example of a tangible resource? a. A secret recipe for a dish b. A process for moving raw materials more quickly through the plant c. A pharmaceutical company's team of research and development (R&D) scientists d. A network of distribution centers in strategic locations around the world

d. A network of distribution centers in strategic locations around the world

What is a competitor analysis? a. A robust analysis of one specific competitor b. A SWOT report of a competitor c. An internal report of what a competitor may discover if the competitor analyzed the company d. An analysis of companies with which a firm competes directly

d. An analysis of companies with which a firm competes directly

A company is debating whether to enter a new industry. The first order of business is to conduct an analysis of the five forces. Why is this a crucial first step in the decision-making process of entering a new market or industry? a. If the barrier for entry is low, and suppliers and buyers have strong bargaining positions, the venture will most likely succeed. b. If the barrier for entry is high, and suppliers and buyers have little bargaining power, the venture will most likely fail. c. If the barrier for entry is high, and suppliers and buyers have strong bargaining positions, the venture will most likely succeed. d. If the barrier for entry is low, and suppliers and buyers have strong bargaining positions, the venture will most likely fail.

d. If the barrier for entry is low, and suppliers and buyers have strong bargaining positions, the venture will most likely fail.

Procter & Gamble (P&G) is a consumer products company that is consistently implementing scanning systems of the environment. They want to identify early signals of environmental changes and trends. P&G's competitors also frequently utilize scanning systems but are not as competitive as P&G. Which of the following could be the reason for P&G's competitiveness? a. The competitors are not as educated as P&G's executives b. The competitors are less concerned with competitive advantages c. P&G's reports are more robust and contain insider information d. P&G's ability to take action on ambiguous, incomplete, or unconnected data

d. P&G's ability to take action on ambiguous, incomplete, or unconnected data

BlackBerry, a one-time leader in secure cell phones, has lost its edge. Without significant upgrades or innovation, the company quickly lost market share to iPhones and Android devices. The company attempted to imitate these advances with the Blackberry Storm product, which flopped. Blackberry was criticized as trying to leverage capabilities beyond its core competencies. Which of the following tools should Blackberry use to regain a scope of their core competencies and determine potential sources of competitive advantage? a. Competitor analysis b. External environmental analysis c. Strategy analysis d. Value chain analysis

d. Value chain analysis

A core rigidity arises when a: a. corporation refuses to change its strategies without an action by the board of directors. b. company puts all of its strategic decisions up for a vote by the company employees. c. firm is led by a CEO with a rigid sense of mission that cannot be swayed. d. resource becomes an obstacle, generating inertia and stifling innovation, often because of conditions in the external environment.

d. resource becomes an obstacle, generating inertia and stifling innovation, often because of conditions in the external environment.

Hypercompetition describes a competitive landscape in which: a. the business is dominated by a single company, pushing all competitors to imitate its strategies and develop similar resources. b. the industry has a high cost of entry in capital investment, research and development (R&D), or hiring of talented employees. c. there are thousands of companies competing within the same industry for the same group of customers. d. the industry is constantly changing with global competition and innovative competitors.

d. the industry is constantly changing with global competition and innovative competitors.

A local community arts nonprofit organization is seeking to expand its programming and is considering putting just one new program in place this year. It may choose painting workshops, youth summer camps, a musical performing arts series, or classes for seniors. The organization's most committed volunteer is a kindergarten art teacher who has offered to be the leader of whichever new program the organization implements. If the nonprofit is utilizing the resource-based model of above-average returns, in which of the following ways should it expand its programming? a. Youth summer camps because the organization should use the knowledge of its passionate volunteer to its greatest advantage b. A musical performing arts series because it has the widest appeal in the community c. Classes for seniors because they can be hosted during the day and have good attendance among those who are retired d. Workshops because they are not currently being offered by any other organizations in the community

a. Youth summer camps because the organization should use the knowledge of its passionate volunteer to its greatest advantage

A company is analyzing its value chain to discover its value-creating activities. While formulating its strategy, the firm will: a. consider the operational functions and support functions to determine which activities contribute the greatest value in the product or service being sold to customers. b. prioritize only its support activities as a source of competitive advantage. c. expand into multiple markets to serve as many customers as possible with its value-creating activities. d. create functional departments to manage these activities.

a. consider the operational functions and support functions to determine which activities contribute the greatest value in the product or service being sold to customers.

The industrial organization (I/O) model of above-average returns: a. puts emphasis on the external environment, which plays a role in determining a company's ability to achieve above-average returns. b. is critical to competing in the global economy and the information age because of its emphasis on organizational development. c. is a new approach to strategic management that emphasizes technological advancement. d. concentrates on the internal assets, resources, and capabilities of a firm to direct its strategic management process.

a. puts emphasis on the external environment, which plays a role in determining a company's ability to achieve above-average returns.

As an industry environment evolves over time, the: a. strength of the competitive forces in the industry change. b. strategic groups become less attractive to new entrants. c. number of companies is reduced, and the environment becomes more consolidated. d. industry becomes more profitable.

a. strength of the competitive forces in the industry change.

In the resource-based model of above-average returns, differences in company performance can be attributed to the: a. unique capabilities and resources of the company. b. strength and effectiveness of managers. c. effective implementation of pricing strategies. d. structural characteristics of the company's industry

a. unique capabilities and resources of the company.

A mission statement can describe: a. what the company does in terms of its customers and their needs and what core competencies it utilizes to meet those needs. b. the competitive environment in which a company is choosing to conduct its business. c. the company's marketing approach and slogan. d. the strategic direction of the company and its major goals.

a. what the company does in terms of its customers and their needs and what core competencies it utilizes to meet those needs.

Which of the following might be a definition for a value-generating activity? a. A new machine that reduces energy costs within a company b. A service the company provides to customers that they pay for c. The core competencies that a company holds that make it possible for it to serve customers in a different way from its competitors d. A customer promotion or sale

c. The core competencies that a company holds that make it possible for it to serve customers in a different way from its competitors

Which of the following is an example of a disruptive technology? a. The introduction of television boxes that enable recording of shows and on-demand content for playback at the viewers' convenience b. The invention of laser eye surgery for corrective vision procedures c. The introduction of Global Positioning System (GPS) technology, which is used in standalone and handheld navigation tools, smartphone apps, and in-car navigation systems d. The use of touch screens on mobile phones and tablets for selecting apps, texting, and dialing

c. The introduction of Global Positioning System (GPS) technology, which is used in standalone and handheld navigation tools, smartphone apps, and in-car navigation systems

An attorney has grown his law firm, gaining new clients in two diverse areas—estate law and immigration law. He's not sure which specialty will become his focus in the long run. At the same time, he believes he has enough work to support hiring a paralegal. However, he is having trouble hiring a paralegal who can manage both types of clients. He was able to find a freelance paralegal referral service that connects attorneys to paralegals who have experience in a variety of specialties. He might consider outsourcing through the referral service because: a. outsourced capabilities provide greater value to customers and are superior to internal capabilities. b. it is less expensive than hiring a full-time paralegal. c. it provides him with the flexibility to gain capabilities to serve both types of clients without making a long-term investment. d. he has a friend that works for the paralegal referral business, and she will earn a bonus if he uses the service.

c. it provides him with the flexibility to gain capabilities to serve both types of clients without making a long-term investment.

An internal analysis is important because: a. company leaders typically do not have a good understanding of how their firms operate internally. b. it compares companies against their competitors so that they can copy competitors' successful strategies. c. not all strategies will work for all firms; successful strategies must be aligned with a company's strengths. d. the business environment is always changing, and the analysis provides insights about the future.

c. not all strategies will work for all firms; successful strategies must be aligned with a company's strengths.

If a start-up U.S.-based automobile parts supplier were to apply a global mind-set to its internal analysis, it would: a. research the history of the invention of the car and the evolution of the automobile industry. b. review sales data of its North American dealerships to determine its most popular vehicles. c. study all of its internal resources with an understanding of which capabilities offer value to meet the needs of U.S., Japanese, European, and Korean automakers. d. find information about the transportation infrastructure in emerging automobile markets around the world, including Asia and Africa.

c. study all of its internal resources with an understanding of which capabilities offer value to meet the needs of U.S., Japanese, European, and Korean automakers.