Chips Newest Guide
Backward vertical integration relates to a firm's ownership of its production of needed inputs while forward integration relates to the ownership of its distribution channels.
True
Economic value created is best described as the difference between a buyer's willingness to pay for a product or service and a firm's total cost to produce it.
True
The concept of an experience curve attempts to capture both learning effects and process improvements at firms.
True
When the value that a customer attaches to a good or service exceeds the price paid for the good or service, this is a consumer surplus.
True
When Daily Planet prints 9,000 copies using its n__ digital newspaper printer, the per-unit cost is 5 cents. When the production is between 10,000-12,000...
11,000 copies
Hammer Industries incurs a cost of $350 to produce one unit of a cell phone. The company's management has priced the product at $600...
$200
Which of the following firms is most prone to experiencing a diversification discount
A company that operates in construction and automotive industries
Which of the following is a drawback of vertical integration?
It increases the potential of legal repercussions
Both LexCorp and Janus Corporation have discovered similar vaccines to prevent cancer. While Janus Corporatio's vaccine sells at $100 per unit...
Low cost input factors
What is the definition of strategy?
Set of goal directed actions to gain and sustain superior performance relative to competition
Which of the following best orders a firm's alternatives to full integration FROM THE LOWEST - TO THE HIGHEST level of integration
Short term contracts->equity alliances - >parent subsidiary relationships
What is the framework that relies on both an internal and external view of a firm and combines the strengths provided by the individual approaches to assessing competitive advantage...
The balanced scorecard framework
Which of the following is an example of an external transaction cost?
The cost of searching for a contract manufacturer
What do (A), (B), and (C) stand for?
A.Value Created B.Consumer Surplus C.Producer Surplus
The effectiveness of balanced scorecard does not depend on the skills of the managers responsible for its implementation
False
Which of the following competitively important asssets is typically excluded from a firm's balance sheet?
Customer experience
What is the difference between economies of scale and learning curve?
Economies of scale focus on the output level at a single point in time, whereas the learning curve effect shows the differences in output over a period of time.
The most challenging diversification strategy is likely to combine existing core competencies with existing markets.
False
As the CEO of Pym Technologies, Hank Pym decides to adopt a triple-bottom line approach. Therefore is likely to ____
Expect his company to be socially responsible
Decisions relating to the geographical locations a firm will cover determine the firm's level of vertical integration.
FALSE
Economies of scope is best described as decreases in cost per unit as output increases.
False
Which of the following is NOT correct about corporate strategy?
Firms generally benefit the most from unrelated diversifications.
In contrast to a differentiator, a cost-leader will___
Focus its research and development on process technologies to improve efficiency
Which of the following is a disadvantage of measuring a firm performance through total return to shareholders and firm market capitalization?
Market volatility makes it difficult to assess firm performance through these measures, particularly in the short term.
What is the concept that indicates the output range needed to bring down the cost per unit as much as possible, allowing a firm to stake out the lowest-cost position that is achievable...
Minimum efficient scale
Combining economies of learning with the existing production technology allows a firm to...
Move down a given learning curve
From an investors' or shareholders' perspective, the measure of competitive advantage that matters m is the____
Return on risk capital
When a firm operates at the minimum efficient scale, the ___
Returns to scale are constant
When a firm makes choices between a cost or value position to achieve competitive advantage, it is primarily involved in____
Strategic trade-offs
Among economies of scale and experience curve effect, experience curve effect is more applicable to service industries.
TRUE
Value drivers contribute to a firm's competitive advantage only if ____
The increase in value creation exceeds the increase in costs
A blue ocean strategy differs from a low-cost strategy in that _____
The intent of a blue ocean strategy is not to be the absolute lowest cost provider because a blue ocean must also increase perceived value
Stark Industries is a large, diversified company. It's weapon and defense technology strategic business unit (SBU) has been recognized as a cash cow...
The weapon and defense SBU operates in a low growth market, whereas the arc reactor SBU operates in a high-growth market.
Which of the following statements is true of transaction costs?
Transaction costs are necessary to explain and predict the boundaries of a firm
A cost-leader is the firm most likely to survive a price war.
True
How can vertical integration help implement differentiation strategy?
When more efficient in organizing economic activity than the markets, which rely on contracts among many independent actors, firms should vertically integrate. Lower costs, Improves quality, Facilitates scheduling and planning
