MGMT 493 Chapter 6

The book Hypercompetition was written by A) Porter. B) D'Aveni. C) Mintzberg. D) Maslow. E) Drucker.

D'Aveni

One company that has successfully found a propitious niche is A) Coca-Cola. B) PepsiCo. C) Frank J. Zamboni & Company. D) Walmart. E) Disney.

Frank J. Zamboni & Company

An acronym for the assessment of the external and internal environments of the business corporation in the process of strategy formulation/strategic planning is A) PET. B) MBO. C) SWOT. D) SBU. E) ROI.

SWOT

The technique that illustrates how management can match the external opportunities and threats with its strengths and weaknesses to yield four sets of strategic alternatives is called a(n) A) IFAS Table. B) EFAS Table. C) SFAS Table. D) TOWS Matrix. E) Issues Priority Matrix.

TOWS Matrix

The T in SWOT represents A) threat. B) tactic. C) tautology. D) task. E) time.

Threat

The last stage of a hypercompetitive industry is reached when the remaining large global competitors A) raise entry barriers. B) move into untapped markets. C) attack the strongholds of other firms. D) compete on cost and quality. E) work their way to a situation of perfect competition in which no one has any advantage and profits are minimal.

Work their way to a situation of perfect competition in which no one has any advantage and profits are minimal

Which of the following is NOT one of the risks of a cost leadership strategy? A) The technology that the organization has been using changes. B) Achieving excessive success causes jealousy amongst competitors. C) Competitors can achieve viable imitations. D) Other bases for cost leadership erode. E) Proximity in differentiation is lost.

achieving excessive success causes jealousy amongst competitors

Collusion A) may be explicit. B) may be tacit. C) is illegal when explicit. D) can be illegal even when tacit. E) all of the above

all of the above

In licensing arrangements A) the licensee can gain technical expertise. B) companies can be aided in entering new countries directly. C) the licensee might become a competitor to the licensing firm. D) companies should never license their distinctive competencies. E) all of the above

all of the above

In a TOWS Matrix, WT Strategies A) are generated by thinking of ways in which a company or business unit could use its strengths to take advantage of opportunities. B) attempt to take advantage of opportunities by overcoming weaknesses. C) are basically defensive and primarily act to minimize weaknesses and avoid threats. D) consider a company's or unit's strengths as a way to avoid threats. E) are ways to get strategists to think "out of the box."

are basically defensive and primarily act to minimize weaknesses and avoid threats

In a TOWS Matrix, SO Strategies A) are generated by thinking of ways in which a company or business unit could use its strengths to take advantage of opportunities. B) attempt to take advantage of opportunities by overcoming weaknesses. C) are basically defensive and primarily act to minimize weaknesses and avoid threats. D) consider a company's or unit's strengths as a way to avoid threats. E) are ways to get strategists to think "out of the box."

are generated by thinking of ways in which a company or business unit could use its strengths to take advantage of opportunities

The active cooperation of firms within an industry to reduce output and raise prices to get around the normal law of supply and demand is referred to as A) a strategic alliance. B) collusion. C) a strategic roll up. D) a merger. E) licensing.

collusion

As an industry becomes hypercompetitive, firms initially respond by A) raising entry barriers. B) moving into untapped markets. C) attacking the strongholds of other firms. D) competing on cost and quality. E) working their way to a situation of perfect competition.

competing on cost and quality

Business strategy is composed of A) corporate and competitive strategy. B) functional and divisional strategy. C) competitive and cooperative strategy. D) corporate and cooperative strategy. E) divisional and competitive strategy.

competitive and cooperative strategy

According to Porter, the term that applies to the breadth of a company's or business unit's target market is called A) competitive scope. B) differentiation. C) focus. D) diversification. E) cost leadership.

competitive scope

When firms follow each other's lead to reduce the level of competition such as GE and Westinghouse did in steam turbines, it is referred to as A) explicit collusion. B) a strategic alliance. C) a mutual service consortium. D) conscious parallelism. E) partnering.

conscious parallelism

In a TOWS Matrix, ST Strategies A) are generated by thinking of ways in which a company or business unit could use its strengths to take advantage of opportunities. B) attempt to take advantage of opportunities by overcoming weaknesses. C) are basically defensive and primarily act to minimize weaknesses and avoid threats. D) consider a company's or unit's strengths as a way to avoid threats. E) are ways to get strategists to think "out of the box."

consider a company;s or unit's strengths as a way to avoid threats

As an industry matures while overcoming fragmentation and becomes dominated by a small number of large companies, it tends to become a(n) A) united industry. B) fragmented industry. C) consolidated industry. D) isolated industry. E) integrated industry.

consolidated industry

In manufacturing toilet paper for grocery store chains (and avoiding competing directly against Charmin), Potlach has followed which of Porter's generic competitive strategies? A) differentiation B) cost leadership C) differentiation focus D) competitive advantage E) cost focus

cost focus

Which of Porter's competitive strategies recommends that a company emphasize a particular buyer group or geographic market and attempts to seek a cost advantage in its targeted segment? A) differentiation B) cost leadership C) differentiation focus D) competitive advantage E) cost focus

cost focus

According to Porter, the generic competitive strategy that reflects the ability of the corporation or its business unit to design, produce, and market a comparable product more efficiently than its competitors is called A) competitive scope. B) differentiation. C) cost leadership. D) diversification. E) focus.

cost leadership

Incentives based on meeting strict quantitative targets is a common organizational requirement for which of Porter's generic competitive strategies? A) cost leadership B) differentiation C) cost leadership focus D) differentiation focus E) collusion

cost leadership

Intense supervision of labor, sustained capital investment and access to capital are commonly required skills and resources for which of Porter's generic competitive strategies? A) cost leadership B) differentiation C) cost leadership focus D) differentiation focus E) collusion

cost leadership

Porter recommends that a division with tight cost control, frequent detailed control reports, a well structured organization, and quantitatively based incentives is required for which of the following generic competitive strategies? A) focus B) differentiation C) cost leadership D) focus differentiation E) concentration

cost leadership

Walmart, as a discount retailer, is an example of a company following which of Porter's competitive strategies? A) differentiation B) cost leadership C) differentiation focus D) competitive advantage E) cost focus

cost leadership

What are the three generic competitive strategies that Porter promotes as the means for outperforming other corporations in a particular industry? A) competitive scope, differentiation, and focus B) diversification, concentration, and competitive scope C) cost, competitive scope, and focus D) concentration, cost leadership, and differentiation E) cost leadership, differentiation, and focus

cost leadership, differentiation, and focus

When a company following a differentiation strategy ensures that the higher price it charges for its higher quality is not priced too far above the price of the competition, the company is using the process of A) low-cost differentiation. B) cost leadership. C) cost proximity. D) basic differentiation. E) price fixing.

cost proximity

According to Porter, the generic competitive strategy that reflects the ability to provide unique and superior value to the buyer in terms of product quality, special features, or after-sale service is called A) competitive scope. B) differentiation. C) focus. D) diversification. E) cost leadership.

differentiation

Amenities to attract highly skilled labor, scientists, or creative people is a common organizational requirement for which of Porter's generic competitive strategies? A) cost leadership B) differentiation C) cost leadership focus D) differentiation focus E) collusion

differentiation

Apple is an example of a company following which of Porter's generic competitive strategies? A) cost leadership B) differentiation C) cost focus D) competitive scope E) diversification

differentiation

If it is to be successful, Porter advises that a division possess strong marketing abilities, product engineering, a creative flair, strong capability in basic research and a corporate reputation for quality or technological leadership, for which one of the following generic competitive strategies? A) focus B) differentiation C) overall cost leadership D) vertical growth E) concentration

differentiation

Product engineering, creative flair, and strong cooperation from channels are commonly required skills and resources for which of Porter's generic strategies? A) cost leadership B) differentiation C) cost leadership focus D) differentiation focus E) collusion

differentiation

Orphagenix, a small biotech firm, avoids head-to-head competition with large pharmaceutical companies by developing orphan drugs to target diseases that affect fewer than 200,000 people. This is an example of which of Porter's generic strategies? A) differentiation B) cost leadership C) differentiation focus D) competitive advantage E) cost focus

differentiation focus

Which of Porter's competitive strategies concentrates on seeking differentiation in a particular buyer group, product line segment, or geographic market? A) differentiation B) cost leadership C) differentiation focus D) competitive advantage E) cost focus

differentiation focus

The particular capabilities and resources a firm possesses and the superior way in which they are used is called A) differentiating capabilities. B) distinctive competencies. C) situational proficiency. D) core competencies. E) distinctive characteristics.

distinctive competencies

According to D'Aveni A) except for a few stable industries, strategy initiatives do not provide sustainable competitive advantage. B) hypercompetition is rare. C) it is enough to gain competitive advantage by being the lowest cost competitor. D) the theory of hypercompetition is not supported by any research. E) the American home appliance industry was immune to hypercompetition.

except for a few stable industries, strategy initiatives do not provide sustainable competitive advantage

A car's cruise control, known as a "bell and whistle," is an example of which of the eight dimensions of quality? A) performance B) features C) reliability D) durability E) aesthetics

features

Most entrepreneurial ventures follow A) differentiation strategies. B) focus strategies. C) no strategies. D) cost leadership strategies. E) all of the above

focus strategies

Which of the following is NOT one of the risks of the focus strategy? A) The target segment's structure erodes. B) The segment's differences from other segments narrow. C) The advantages of a broad line increase. D) Focusers exit the industry. E) Demand disappears for the product in the target segment.

focusers exit the industry

The focus strategies will likely predominate when many small and medium sized local companies compete for relatively small shares of the total market in a(n) A) united industry. B) fragmented industry. C) consolidated industry. D) isolated industry. E) integrated industry.

fragmented industry

Business strategy focuses on A) ensuring that the company maintains the existing market share that it has historically enjoyed. B) improving the competitive position of a corporation's products or services within the industry or market segment served. C) providing adequate shareholders' return on investment. D) preventing the competition from gaining a competitive edge by undermining their marketing plan. E) recovering the competitive lead by using all available resources that the company can provide.

improving the competitive position of a corporation's products or services within the industry or market segment served

Tacit collusion A) involves direct communication among competing firms. B) is most likely to be successful if there are many competitors. C) is seen with conscious parallelism as practiced by GE and Westinghouse. D) is not illegal. E) is most effective when the industry does not have a firm that acts as a price leader.

is seen with conscious parallelism as practiced by GE and Westinghouse

All of the following reflect criticisms of the SWOT analysis EXCEPT A) it uses no weights to reflect priorities. B) it only requires a single level of analysis. C) it provides a rational link to strategy implementation. D) it uses ambiguity in words and phrases. E) it generates lengthy lists.

it provides a rational link to strategy implementation

Which strategy has been used successfully by Yum! Brands to establish KFC and Pizza Hut restaurants across the globe? A) joint venture B) licensing arrangement C) strategic alliance D) marketing strategy E) value-chain partnership

licensing arrangement

In the development of a SFAS matrix, the first step is to A) enter the ratings of how the company's management is responding to each of the strategic factors. B) calculate the weighted scores. C) list the most important EFAS and IFAS items. D) indicate short-term goals for the duration. E) enter the weights for all of the internal factors.

list the most important EFAS and IFAS items

Disadvantages of joint ventures include all of the following EXCEPT A) loss of control. B) lower profits. C) probability of conflicts with partners. D) likely transfer of technological advantage to the partner. E) mutual dependence.

mutual dependence

The kind of strategic alliance in which there is a partnership of similar companies in similar industries who pool their resources to gain a benefit that is too expensive to develop alone is the A) joint venture. B) licensing agreement. C) value-chain partnership. D) mutual service consortia. E) holding company.

mutual service consortia

The "cell" chip created by IBM, Sony Electronics, and Toshiba was a result of pooling their resources in a A) joint venture. B) licensing arrangement. C) value-chain partnership. D) mutual service consortium. E) competitive advantage.

mutual service consortium

According to Barney, under which condition would tacit collusion most likely be successful? A) There is a large number of identifiable competitors. B) Costs are not similar among firms. C) One firm tends to act as the price leader. D) Sales are characterized by a high frequency of large orders. E) There are low barriers to entry in the industry.

one firm tends to act as the price leader

Which of the following is NOT considered a strategic alliance success factor? A) Have a clear strategic purpose. B) Operate with short-term time horizon. C) Agree on an exit strategy for when the partners' objectives are achieved or the partnership fails. D) Minimize conflicts among the partners by clarifying the objectives. E) Identify likely partnering risks and deal with them when the alliance is formed.

operate with short-term time horizon

The text authors note that the essence of strategy is A) opportunity divided by strengths minus weaknesses. B) strength divided by opportunity. C) threat divided by capacity. D) threat divided by opportunity. E) opportunity divided by threat.

opportunity divided by strengths minus weaknesses

A corporation's specific competitive role which is so well-suited to the firm's internal and external environment that other corporations are NOT likely to challenge or dislodge it. A) strategic fit B) propitious niche C) common thread D) business screen E) implicit strategy

propitious niche

Jet airplane manufacturers often enter into strategic alliances to A) obtain new capabilities. B) obtain access to specific markets. C) reduce financial risk. D) reduce political risk. E) preserve autonomy.

reduce financial risk

Which of the following is NOT one of the questions that development of a competitive strategy should raise? A) Should we compete on the basis of lower cost? B) Should we compete head-to-head with major competitors? C) Should we differentiate our products or services on some basis other than cost? D) Should we compete by garnering political support of influential leaders? E) Should we compete in a niche market that we can satisfy which is superior to that of the competition?

should we compete by garnering political support of influential leaders?

The concept that advocates management's attempt to find a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses is called A) environmental analysis. B) position analysis. C) strategic evaluation. D) objective analysis. E) situation analysis.

situation analysis

The two general types of cooperative strategies are A) competitive and functional. B) collusion and competitive. C) strategic alliances and collusion. D) strategic alliances and competitive. E) competitive and collusive alliances.

strategic alliances and collusion

A method developed in the mid-1990s as an efficient means to quickly consolidate a fragmented industry can be referred to as a A) merger. B) strategic rollup. C) cost strategy. D) differentiation strategy. E) focus strategy.

strategic rollup

According to the text, unique market opportunities that are available for only a particular time are called A) situational occasions. B) critical openings. C) strategy implementation. D) strategic windows. E) trigger points.

strategic windows

According to Porter, a business unit in a competitive marketplace with no generic competitive strategy is A) achieving synergy. B) practicing innovative leadership. C) stuck in the middle. D) not goal directed. E) last in line.

stuck in the middle

A secret salary cap was the contention in a 2012 collusion lawsuit filed against A) KFC. B) the National Football League. C) GE. D) Major League Baseball. E) ESPN.

the national football league

Which of the following is NOT a reason companies or business units may form a strategic alliance? A) to obtain access to specific markets B) to reduce financial risk C) to reduce political risk D) to set prices in the industry E) to learn new capabilities

to set prices in the industry

Which of the following is NOT one of the eight dimensions of quality? A) serviceability B) durability C) performance D) value E) features

value

The kind of strategic alliance in which a company forms a strong and close long-term relationship for mutual advantage with a key supplier or distributor is the A) joint venture. B) licensing agreement. C) value-chain partnership. D) mutual service consortia. E) holding company.

value-chain partnership

When P&G (the maker of Folgers and Millstone coffee) worked with Mr. Coffee, Krups, and Hamilton Beach to market Home Café, they engaged in a A) joint venture. B) licensing arrangement. C) value-chain partnership. D) mutual service consortium. E) competitive advantage.

value-chain partnership