MAN4720 exam 2
how do our customers view us? what core competencies do we need? is whusing which tool
balances scorecard
which alliance type is teh reanult nissan alliance, where nissan owns 15 percent of renault
equity alliance
a company is cnsidered to bea single bsiness firm when at lest __ percent of reveneus are generated by the dominate business
95
under the triple bottom line famework, being proactive with __ dimensions makes good business sense
non-economic
which of the followign firms could have benefited from the values contained in the tripe botom line
BP
the most common type of alliance is ++++ which is baed on contracts between firms
non=equity alliance
each stage of the vertical value chain typically represtents
a distinct industry
faiulrue to achieve competitive avantage is an indication of
a failure in straegy
measuring profitability on a realtive rather than absolute basis is important because all of the following except
a firm that has the greatest overal profit will sustain competitve advantage
information asymmetries occur when
a firm transacts in the market with a seller who has better information about ht product or service
disney's purchase of Pixar is an example of ___ in which both teams believed that joining the two companies was a good idea
a friendly acuqisition
a on equtiy alliance ha a major drabck which is that it has
a lack fo trust and commitemtn
competitive advantate is best assed by using
a relative benchmark
___ occurs when a enetwork exhbities local clusters with high centrality
a small wrok phonemonen
all of the following statemetns are TRUe about strategy EXCEPT
a straegy that has provided competitive advantes in teh past will most likely do so in the ufture
with the intent of developing processes, rpdocuts erices to lead to a competitive advtantage
a strategic alliances
which of the following acquisitions would be considered the LEast related
a toy manufacturer acquiring a fcofee company
which of the following is NOt strategic advantage of forward integetarion
ability to secure critical supplies
exxon outperformed liberty in __ terms, and liverty outperformed exxon in __ terms
absoulte, relative
krafts hostile takeover of cadbury was mainly motivated by kraft's desire for
access to new markets and distribution channels
a __ is the purchase or takevoer of one company by another
acquisition
when learge, incumbent firms buy up startup companies, the ransaction is generally described as a
acquisition
alliances can be governmend by all of the followign mechansisits excepts
acquisitions
addias acquried rekekbok becaue
adidas and reebok wanted to overcome its competitive diadvantage
___such as payiing salaries and setting up a shop floor are internal transaction costs
adminitrative costs
understanding the shareholders veiw of value creation under the balanced scorecard leasds a firmto
adopt a more future oriented perspective
perofmrance metrics used toa sses the effectives of aifrms straegy should be
aggregated and viewd from an overal company perspective
when a firm is fully vertically integraetd
all activities are conducted within the boudnaries of the firm
ecological conerns such as sustainability can
all of these
hyundai's reputation for quality is an asset that
all of these
the tripple blotom line is imporatn to competitive advantage because
all of these
these routines and procuesre bring competitive value to the firm because
all of these
what is one of the challeneges of measuring competitive advantage using the econmic value creation approach
all of these
serves as an alliance process resource and business intregetoar between teh two alliance partnrs
an alliance anager
___ it a senior, corporate level excecituve reposnsible for high level support and oversitht
an alliance champion
has the tehcnical expertise and knowdle needed fot he specific technical are
an alliance leader
which of the following is not incuded in the team
an alliance planning supervisor
a liquidity event is all of the following except
an opportunity for the firm to offer low powered incentives to employees
which of the following is NOT an example of a firm benefiting from ecnomies of scope
anheusure-besuch spreading its fixed costs over million sof gallons of beer produced a year
staekholders under the stakeholder theory are
anyone who makes contributions to a firm and expects inducement in return
transactions costs
are all of these
today many companies use poeopel soft and EDS to mange their human resource,s by doing thsi these firms
are doing all of these
which grew to 25 telecom companies what was teh main cause of the dmies of the network
atand tcame to dominate the network adn smaller firms existed
these diversiciation events could be based on the __ which occurs wen firms copy the moves o their industry vial
bandwagon effect
if a firm wants to have more ownership of the activiteis closer to product inputs or design then it shoud
backward vertically integrate
30 percent revenues come from new product innovations. it also measures how much external learning and colllaboration the firm is engaging in. 3 M is clearly implementing a __ approach to asseing competitive advantage
balanced scorecard
organizational learning, innoation, an financial perofmrance are all ____ performance metri s
balanced scorecard
three traditional approachs are are considered fairl one-dimensional when measuring cmopetiive advantage include all of the following except
balanced scorecard
these stock indices are useful __ the allow the public to asses whther microsoft has a competitive advantage
benchmarks
firms use related diversification strategies in order to
benefit from economies of scale and scope
which of the followong is NOT a stragetic advnatage of backard intengration
bettera ccess to end users
a firm's ___ captures the histroical costs of a firm's assets
book value
competitive advantage can be viewedd as being
both relative adn transitory
when a firm has a greater positive difference between cost and value than its rivals, it can achieve competitive advantage by
charging the same or even lower prices and selling more goods and services
analzying accounting profitability is important to amangers because
comparing "hard numbers" against rivals provides compettiive insight
firm competiive perofrmance can be best judged by
comparisons to rivals and the industry
one of the main lessons from the chapter 5 case was comparing google and microsoft and measuring overall firm performance is that
competitive performance differences should be measured by using a variety of evaluation tools
the basic way that the balanced scorecard provides competitive insight to managers is through the use of
concise reports that track and measure chosen metrics
when it would cost the firm more to pursue and anctivity in house tha nobtaining that activity in the xternal market the firm should
consider options such as short term contracts or strateic alliances
economic value can be viewed as the amount of the total value created that is captures and distrbuted between
consumer and producer
in the economic value creation frameowrk of measuring competitive adantage v-p=
consumer surplus
when the value that a customer attaches to a good or service exceeds the prdice paid for the good or service this is an
consumper surplus
__ are addtional costs tha tare attached to teh trelated diversication stragey becaue othe managing the number, siz,e and types of busineses that are linked to one another
cooredination costs
the boston consultign gruop marix is a tool that helps with
coproate proftiolio planning and restructuring
a tool that helps managers evaluete how the firms core competitnenceis can support certain diversiciation strateies i the
corecompetence market matrix
___ describes euqty investments established by firms in etnrpenruaiate ventures
corporate venture capital
large firms frequently have dedicated ___ unitys, such as johnson and johnson development corporation
corporate venture capital
in order for adiversicaion stragny to enhacen firm perofamcne is must do any of the following except
create diversification discounts
from an economiv value creation perspective, competitive advantage is achieved by the firm that does which of the following
creates and captures more economic value than it's rivals
in tha ttempy they formulate and executive corporate level strategy by using all of the following dimensions excdpt
cultural integration
measuring how a customer views a firm under teh blaance scorecard famework is imporant because
customer perspective is directly linked to firm revenues and profits
the mergers between delta and norwest airlines, united airlines and contintenal, and southwest and aitrain ___ in teh industry overall
decreased compettiive intensity
to accomplish effect alliance mangetent, it is suggest tha firms carete a ___ endowed wit its own resrouces and support staff
dedicated alliance function
if a firm is highly visible and priminent in the cluster aand has acces to many chanels of inomation it has ahigh
degree of centrality
from an accounting profitability perspective, compettivea dvantage is achieved by the firm that does which of the following
delivers the most postiive profitability metrics
when a firm that follows teh urnelated diversificaiton straey allocates capital from intenral source,s it can create value by doigng all of the following except
disregarding its debt rating and inesting large amoutns oc apital in projected grwth areas
when the stock prive of highly diversified firms is valued less tha nth esum of its individual business units a ___ occurs
diversication discount
management of af irm must decide what range of prodcuts and serices the frim should offer. this determines the firm's horizontal integration or
diversification
rather than seperate through using the same resources and techonology then
economies of scope occur
___is created when a customer is willing to pay more fora good or service than it costs a firm to produce it
economv value
the ___ is the idea that the market price of a firm's stock indcludes all publicly availble information about a firm's performance
efficient market hypothesis
when crafting strategy under an economiv value context, the goal is to achieve all of the following except
ensuring that the value captured is equally distrubed between producer and consumer
firms would use strategic alliances to ____ in such countries as saudi arabia or china
enter new markest
cvc investments are ___ investments by established firm in entreprnuatal venture
equity
toyota is using a ___ with tesla motors, a designer and devloper of electric cars, to learn new knowledgea nd gain a dwindo into new technlogy
equity alliance
one partner takes partial onwership in the otehr partern, are less common than contactual, on equity aalliances because they often requrie larger investmetns
equity alliances
___ alliances ten dto produce stronger ties and greater trust bwetween parteners than __ alliances do
equity and non equity
in a non equity alliances, firms tend to share ___- that can be codidfied
explicit knowledge
total return to shareholders includes stock price apprecation and is an __ measurement that reflects how the market views a firm's competitve position
external
all of teh following are true about Exxon's stragic move except
exxon is pursuing an unrelated diversification strategy
non economic factors such as _ and __ are often rewards of adopting the triple bottom line framework
firm repuation; goodwill
if a firm wants to have more owernship of activities closer to the end product or custoemr it sohould
forward vertically integrate
ifit can enter into a __agreement which grants the right ao andindivual or group to use the firm's trademwork and business processesto sell goods and services that carry the firms brand name
franchising
this is an example of
imrpoves a firm's social and ecological responsibility
if a firm wishes to expand beyond a single market and throw through being active in several different countries, it is pursing the ___ diversiication straegy
geographic
evalutating this information would tell you that
google has a sustained competitive advantage from a shareholder value creationg framework
macroeconomic factors such as unemployment rate and economic conraction
have a direct bearing on a firm's stock price
__ is NOT one of hte drawbacks to horizontal integration
higher costs
the truple ottom line and the balanced screcard are __ faemworks thathelp firms evalute which strategy is working
holstic
__ is the process of acquiring and merging with competitiors. leading to industry consolodation
horizontal integration
firms use ___ to lower costs through economies of scale, and thus enhance their economic value creation and in, turn their poerformance
horizontal integration
looking through the lens of the structure conduct performance model. __ hanges in the underlying industry structure favro teh sruviving firms
horizontal integration
a __ describes an acquisition in which the target company does not with to be acquired
hostile takeover
which of the folowing is Nt indluded in teh pashe of post formation alliance management
identify partner compatitivabilty
the balances corecard is a tool for strategy__ not__
implementation not formulation
which of the following is NOT ocnsidered as the benefit of horizontal integration
imrpovement of supply chain coordination
how do we create value? is relevant to all of the following xcept
increasing teh value added to aprodut allong the supply chain
a__ is where the transfomration of raw materials into finsished goods and servies occurs along distinct vertical stages
industry value chsain
political maneuvering by managers to influence rsource and capital alocation can result in firm inefficiences in a related diversified fir. these costs are called
influence costs
assets such as innovationg and quality are __ assets that contribute to growth potential but are typically not included in a firm's book value
intangible
__ have become more imporatant than tangible assets when it comes to a firm's stock market value and compettive advantage
intangible assets
balanced scorecard appraoch, a strategic objective for a firm is to
integrate internal and external performance data to assess and strengthen the firm's current position
in a join fenture all of the following is true except
is it mostly weak ties
under the accounting profitability framework to competitive avantage, comparign return on revenue ROR between companies is important becasue
it adjusts for size differences and providesa relative comparison
which o the following is NTO realted to stratigc networks
it ahs the ability to effectively manage teh three alliance related task
which of the following is NOt realted to horizaonal integration
it concerns the number of activities a firm particpates in up and odnw the industry value chain
which of the following is true concerning the blanaced scoreard
it does not provide any insight on ho wo corret a problem once a firm eviates from its goals
firms use a balanced scorecard for all of the following reasons except
it encouracges the firm to improve its ecological postion
what did toyota to to instill this trust
it made a credible comitment by taking an equity stake in orocobre
whicih of the followig is NT one of the pros in equity alliance
its easy to intiiate and terminate
which of the following is NOT one of hte pros in a joint venture
its flexible
hulu, owend b nbc fox and abs is an example of a joint venture
join venture
__ which is a psecial form og stragic alliances whereby two or more partners create and jointly own a new organization
joint venture
NIMMi, fored between FM and toytao, was the first ___ in teh US automobile industry
jointe venture
find novel solutions to thorny problems because hse foten has ccaccess to diver knwoeldge, and can link that info to impleent soltions in the form of new produts pr opcrsssses
knowledge broker
which of teh following is NTone of the cons in equity alliance
lack of trust and commitement
shareholdrs include individuals and organizations that are the ___ of a public company
legal owners
when comparing exon mobil and liverty media using the return on revenue metric, __ had a relative competitive advantage in 2010
liberty media
__is a form of long term contracting that is gernally used in teh manfucatring seco which engable s a firm to commrcialize intelecctual proerlty like patents
licensing
___ are contractual alliances in which teh particpants regularly exchange codified knoweldge
licensingn agreemetnts
a small workld pehonomeis a sitatuion in which a netowrk exhibits ___ clusters, weach with a high degree of centrality
local
one way to overcome the principal agent problem is to
make managers owners through stock options
__ is a form of self delusion in which mangers convince themforselves fo their superior skills in teh face of clear evidence to the contraty
mangerial hbris
the microsfot ibm licensing agreement for ms dos is an example of
non equity alliance
a firm's stock market valuation is based on histrocial accounting data and __-
market expectations for the future
markets often provide high powered incentives than firms when i comes to employee motivation for economic transaction because
markets provide incentives like IPOs for individual work efforts
when viewed from an ecnomivc value creation perspective, the major strategic objective for a firm to
maximize the economiv value created
a ___ describes the joing of two independent companies to form a bombined entity
merger
the combining of two firms of comparable size is often described as
merger
all of the folllowing are true about FMCs successful implementation of abalnces corecard except
mnagers were able to formulate new strategies
under the core competence market matrix, the most difficult diversifciation strategy is combing ___ with ___, because core compttience s must be build. thoweve thi screates thep otentail for mega opoprutnies and isgnifacnt future gorwn opourtnies fora firm athat chieve this
new core competencies; new markets
which otype of alliance is motst commonly used
non eqututy alliance
to __ a sotck returns means tto compare the percentage change of a stock privce over the course of a certain time period from a common base year
normalize
one of the drawbacks to the accounting profitabilty approach to measuring ocmpetiive advantage is that it does not consider
off balance sheet items such as pension obligations
when one firm makes a crredible commitemtn to another firm it is doing all of the following except
offering a promise that it will perform in teh futur
a __ is the value lost due to choosing to use resources for one alternative over another
opportunity cost
the main vlue of oracle's acquitiosn of peoplesoft is
optimtizing their netire vertial can horizontal value chains
which of the folowing is NOT a risk of vertical ingegration
organizational planning often imporves when a firm integrates
the __ relationstip is the closest to a firm being fully intengrated. in this relationship transaction costs typically arise from politiclal turf battles between teh forporate ofice and teh stanalone business
paretn subsidiary
in teh first phase of alliance management, ___ captures aspects of cultural fit wett ndifferent firms
partner compabilitiy
a dinstinctive characeristics of equity alliances is
partners taking an ownership position
the most freuent forms non equity alliance includence the following except
partnership agreements
a type of asset that has physical and engineering proerpties that were specifically created to satifsy a paritcula customers are which ofrm of asset spciicitaly
physical asset
when an employee of a firm follows his or her own interests such as pursing managerial persk wtih performacing activities on behalf of the owner of the firm, a ___ problem occurs
principal-agent
when a firm is acie in several different product markets it is pursinga n __ diversiciation stragegy
product
pepsico sells a wide variety of beeverages and food products in 190 countries. it is clearly engaging in ____ to achieve continuous growth
product market diversification
suppose that a firm watned to find profitabilty information about its privals. the most likely source on this info woul dbe
pubicly availble information including 10-k reports
___ to creat long term partnerships with serverl smaller technology firms co located in silcion vallue
relation spefici investmetns
researh indivates that when it comes to the diversifciation perofrmance relatioship
realted constrained and related linked strageies are assoaited ith higher firm peofmrance
economies of schope often occur when a firm is using teh ___ diversification stragey because the firm is able to pool resources and leverage competienices
related
when a firm uses many links among its businesses, it is engaging in ____ diversification strategy
related constrained
which of the following dversiciation stragegies most cloesly descibres disney
related linked
an alternative perspective to the transaction costs economics fameowrk concerging wthe make or buy decision is the _- view of the firm, which focuses the firm less on transaction costs and more on its capabilties and knowledge and wat it does wel
resourcebasess
return on invest capital, return on equity, return on revenue, ___ are the proftabiltiy metrics that are commonly used by a firm in the quest for compettitive advantage
return on assets
shareholders are most concerned with ___ when it comes to measuring a firm's competitive advantage
return on risk capital
these type of costs are referred to as
search costs
when crafting strategy under a shareholder value creation context, the goal is to achieve all of teh following except
sell more stock than the competitive
if a firm wishes to bridge the gap between being fully integrated and trasactving in the market place, it can enter in a __ which is a contractual arrangement to obtain inputs for a time period of generally a year or less
short term contract
all of the following are forms of strategic alliances except
short term outsourcing
svvrpy ___ sacrifices and to ensure ___ reqrds
short term, long term
__ assets are assets like special equipemnt that are reuires to be co located and used by a firm. such as mineral extraction equipment and bauxite mines
site specificity
when a firm vertically integarates along the industry supply chain and invest in specific asstes in orer to suppots its activities it has invested in
specialized assest
under the shareholder value creation framework, ___ makes it difficult to evaluate firm perofrmance, particularly in the short term
stock market volatility
under the balanced scorecard farmeowrk, management concentrates on all of the following areas when it comes to improving how custeomrs view the firm except
stock price
which of the following is not one of the three critical factors used to evaluate ecnomic value creation and competitive avantage
stock price
which fo tehf ollowings is nto pat of the BCG matriz
strangers
___ allow a firm to enter into a voluntary arrangemnt with another firm with the intent of sharing knowledge and rsources to develope processes, products, or serices togethe
strategic alliances
a __ is a social strcuture compse of multile organizations and the links among the nodes
strategic network
start alliance is an exampl oe
strategic network
can affect serveral of porter's five forces for the survivign firms. which of the following would this include
stregthening bargaining power vis a vis supplier and buyers
two roganizations are connexted to teh same organization but are not connected the none another
structural hole
managers wishing to diversify the firm must remember that
successful diversification mus be aligned with and strengthen a firm's business strategy
all of the following are fundamental elemtns of an industry value chain except
support activities
if microsoft continues to outsell all other rivals in teh smart phone industry fro the next five years, it will have aciehved
sustained competiitive advantage
joint ventures alliances are where ___ knowledge is exchanged
tacit and expilcit
equity alliances allow for the sharing of ___ tht cannot be codfied
tacit knoweldge
the types of assets that are the primary focus of accounting data but are no longermost imporatnt to cocmpetive advantage
tangible
apple and nike are utilizing __ to partially rely on outside market firms wile suppporting their forward vetical integeration stragegy
taper integration
the two alternatives to vertigal integration that provide similar benefits while reducing the risks to the firms are __ _and ___
taper integration and strategic outsourcing
equity alliances are forms of strateic alliances that do all of the following except
temporarily allow one partner to use the other's trademark and business processes
under ths hareholder value creation approach to measuring competitive advantage, profitability and stock price increases indicate
that a firm is utilizing effective strategies
but underperformed in the NASDAQ over th previous5 years indicates all of thef ollowing except
the NASDAQ is not a good indicator of competitive advantage
multidimensional approach to evaluting a firm's competiieve advantage position by utilizing specific questiosn and eprformance metrics is
the balanced scorecard
the following characteristics are all related to acquisitions except
the combining of firms only of comparable size
under the economic value creation framework, value can be viewed as
the consumer's maximum willingness to pay
vertical intengration involves all of the following except
the expansion by the firm into different product lines and markets
the two industries CEO immelt had developed provide strateic imporatnt to teh firm are
the green economy an dhealth care
which of the following is the most salient prblem iwth GE losings its AAA bond raiting
the higher cost of money
using either accounting profitability or shareholder value creation approach to determine whther microsoft or google have a competitive advantage is complicated by the fact that
the key to their perorance is based on intangible assets
the more constrained the relatedness of diversification
the more links there are among teh bussiness owned by the organization
the third phase ina firms alliance management capabitiy concerns
the ongoing management of the alliance
advantages to organizing an economic activitiy within the firm make include all of tehf ollowing except
the principle agent problem
value creation is important to competitive advantage becasue
the product or service that is valued the highest by the customer can charge the highest price
a drawback to evaluating compettive advantage under the shareholder valution perspective is
the psychological mood of innvestors does not necessarily reflect how effective a firm's strategy actually is
according to ___ critical resources and capabilties frequently are mebeedded ins trategic alliances that psan firm boudnaries
the realtionsal view of competitive advantage
corporate strategy is oncerted with determining the bounadries of the firm among geographic andprodcut/serivce dimensions this is rerffered to as
the scope of the firm
a frawback for a firm engaging in a short term contract is
the supplying firm has no incentive to make additonal trasanction specific iveestments to icnrase perforance or quality
which of teh following is not realted to strong ties
the transfer of explicit knoweldge only
which of the following is a key characteristic of weak ties
the transfer of explicit knoweldge only
what is our social impact is a question most relevant to
the triple bottom line
the effectiveness of the balanced scorecard is contingent uon all of the followinge xcept
the type of technology used
from an ecnomic value created perspective, the volume of a firm's good or services sold is generally driven by the realtionship between __ and __
the value created for customers; the price of the good or service
a drawbck to evaluting competitive advantage under the balanced scorecard perspective is
there is little uidance for management as to which metrics to use
long term contacts such as licensing and rahnchsingoffern and avatage of ver shrot term ocntract becasue
there is more incentive for transaction specifict investments
all of the following are true about conglomerates except
they are likely acquisison targets for large single business firms
under the economic value creation framwork, producer surplus is imporatnt in the quest for competitive advantage becasue
this is the porfit that a firm captures when prdocuing and selling a good or service
al of the folowign are reasons why a firms seeks to diversify except
to dtermine ho to compete in current markets
the reasons firms neter into alliances inlcude all of the following except
to increase competitive intesntiy
despite M&A destryoing rather than creating shareholder value, reasons for mergers in the following exvept
to lower exit barreirs
this as due to which of the following
to stregthen competitive advantage
the return on risk capital that includes stock price appreciation plus dividents received over a specific perios is
total return to shareholders
applying te __- framework helps managers make economic decisions namely; what activities ot pursue within the firm and which to obtain from the external market
transaction cost economies
the costs associated with searching for economic agents with whom th firm ocntracts, negotiates and enforces contracts with are
transaction costs
the costs associated with the make or buy question when determining the scope of a firm are
transaction costs
the __ is realted to the stakeholder thoery in that it attempts to fulfill obligations to constitencies, including employees, customers , suppliers and communities
triple bottom line
this is an example of which of teh folllowing
triple bottom line
when a firm attempts to improve it seconomic, social and ecological perforamnce, it is taking an __ approach to asseising compettive advantage
triple bottom line
which of the following is NOT one of the profs oa non equity alliance
trust and commitemnt
which of the followig is oen of th beneits of an equity alliance
trust and commitment
this premium indciates that
understand that firsm with related diversication straeies are more likley to improve tier perofrmance than other diversifed firms
when a firm like GE has few if any linkages among its businesses, it is pursing an ___ diversification stragey
unrelated
__ firms are often uanble to achieve additional value creation
unrelated difversificed
__is measured by a product's perfomrance characteristics and its attributes for which customers are willing to pay
valuei
iindustry value chaisn consist of all the process that transform raw materials into finsiehd goods and srvices these value chains are also called
vertical value chainns
when it would cose the firm less to pursue and anctivity in house than obtaining that activity from a supplier in the external market, then the firm should
vertically integrate
when anheuser bsuch inbev sld busch entertainment it was doing all of the following except
weakening its position
which of th following questions is the most relevant for corporate-level straegy
where to compete
all of the following are decsisiont aht managers must makew hen formulation ecoporate straegy ExCEPT
whether the company should compete thorugh diffferentiate or cost eladership
__ and __- are frequtnly stepping stone towartd full integnration fo the partner firms either thorugh a merger or acquisition
wquity alliances; joint ventures
