MGMT 352 Exam 1

intangible assets add great value to a firm primarily because...

Knowledge and culture take time to develop and are generally difficult to imitate

Porter's Five Forces

threat of entry, threat of substitute, supplier power, buyer power, and competitive rivalry

Nicki paid $900 for a camera that she thought was worth $1100 for all the features included in it. For the consumer electronics firm selling the camera, however, the cost of producing the camera was only $350. What is the producer surplus in this scenario?

200, the assumed value - the price

If Honey Electronics and Junglectics, companies that manufacture televisions, develop the same customer knowledge base and create products that provide the same customer appeal as Alpire, a market leader in consumer electronics, then

Alpire will have a resource that is valuable but no longer rare

T or F the stronger the five forces in a n industry, the greater the industry's profit potential

FALSE, if the porters five forces were stronger in an industry it would be more difficult to be profitable

A firm's return on revenue is 0.2 and its asset turnover (revenue/total asset) is 0.8. What do you infer from this information?

The firm's return on asset is 0.16.

T or F in an industry the barriers of entry are high when capital requirements are high

TRUE, It is more difficult to enter a industry if the capital requirements are high making the barrier to entry high as well

T or F The relative bargaining power of suppliers is high when suppliers provide products that create high switching costs

TRUE, if it is difficult to switch suppliers then that would make their bargaining power higher

T or F A company that uses a differentiation strategy can achieve a competitive advantage as long as its economic value created is greater than that of its competitors

TRUE, if the economic value created is higher than that of the competitors then they will have a competitive advantage

T or F a firm successfully implementing a blue ocean strategy uses value innovation to compete in highly contested market spaces

TRUE, value innovation and the blue ocean strategy use the idea of differentiation and low cost competition at the same time

Differentiation

actually differentiating the market offering to create superior customer value

in the context of SWOT analysis,what would best exemplify a firm's external opportunity

an increase in its customers' disposable income

The value chain describes the

internal activities a firm engages in when transforming inputs into outputs.

focused cost leadership strategy

same as the cost-leadership strategy except with a narrow focus on a niche market

focused differentiation strategy

same as the differentiation strategy except with a narrow focus on a niche market

cost leadership

the positioning strategy of producing a product or service of acceptable quality at consistently lower production costs than competitors can, so that the firm can offer the product or service at the lowest price in the industry

in a focused cost-leadership strategy, a firm....

will deliver low-cost products and services to a specific, narrow part of the market