MGMT 495

solve a problem for a consumer

A customer-oriented vision statement focuses employees to think about how best to:

provide products similar to its competitors, but at lower prices.

A firm is said to gain a competitive advantage when it can:

organizational structures are aligned with the firm's vision statement

A positive relationship between vision statements and firm performance is more likely to exist when:

A firm that achieves superior performance relative to other firms in the same industry or the industry average has a(n) A. competitive advantage. B. balanced scorecard. C. power position. D. equity leverage.

A. Competitive advantage

The average cost of production for a bottle of vitamin water in the industry is $4 while its average price is $7. StoreAll Inc. manufactures the same product for $3 per bottle and sells it for $7 per bottle. Which of the following statements is most likely true of StoreAll Inc. in this scenario? A. It has a competitive advantage in the industry. B. It has a competitive disadvantage in the industry. C. It has competitive parity with other firms in the industry. D. It has formed a strategic alliance with other firms in the industry.

A. It has a competitive advantage in the industry.

Which of the following stages of the strategic management process involves an evaluation of a firm's external and internal environments? A. strategy analysis B. strategy implementation C. strategy formulation D. strategy control

A. Strategy Analysis

Shortly after the small island of Balamia experienced multiple unexpected high-intensity earthquakes that caused massive destruction, many banks and insurance companies filed for bankruptcy. This left the economy of the country in a poor state. The natural calamity in Balamia best exemplifies A. a black swan event. B. a wild card event. C. skewness risk. D. kurtosis risk.

A. a black swan event.

The management of Five Square Corp. wants to reduce the separation between ownership (by shareholders) and control of the firm (by professional managers). Which of the following practices would best help the company do this? A. allowing employees to purchase the stock of the company at a discounted rate B. reinvesting the annual profits of the company into research and development C. issuing new additional shares to the existing stockholders in proportion to their current holdings D. declaring the annual profits as bonus dividends to the existing stockholders

A. allowing employees to purchase the stock of the company at a discounted rate

A firm's stakeholder strategy primarily allows the firm to A. analyze and manage how various external and internal stakeholders interact to jointly create and trade value. B. effectively isolate its internal stakeholders (like shareholders and employees) from its external stakeholders (like customers and media). C. transfer the contributions external stakeholders make into benefits for the internal stakeholders. D. facilitate the development of a competitive relationship between its internal and external stakeholders.

A. analyze and manage how various external and internal stakeholders interact to jointly create and trade value.

A firm always has a competitive disadvantage when its return on invested capital is A. below the industry average. B. 2 percent or lower in a declining industry. C. about the same as its closest competitor. D. declining steadily over two or more years.

A. below the industry average.

If SA Pharmaceuticals obtains an 18 percent return on invested capital, which of the following will help determine if it has a competitive advantage over other pharmaceutical companies? A. comparing the return to the return on invested capital obtained by other firms in the industry B. assessing the value based on the shareholders' expectations of return on their capital C. evaluating the liquidity ratios for other pharmaceutical companies D. comparing the value to the history of the firm's return of investment over a number of years

A. comparing the return to the return on invested capital obtained by other firms in the industry

The Scoop, Ltd. is a magazine publishing company whose average return on invested capital is approximately 5 percent. Because magazine publishing is a declining industry, the industry average has been negative (-5 percent) for the last few years. In this scenario, The Scoop Ltd. has a A. competitive advantage. B. balanced scorecard. C. competitive disadvantage. D. power position.

A. competitive advantage

Stakeholder impact analysis primarily helps a firm A. gain a competitive advantage while acting as a good corporate citizen. B. lower the difference between its value creation and costs. C. single-mindedly focus on shareholders alone. D. exploit external stakeholders to benefit internal stakeholders.

A. gain a competitive advantage while acting as a good corporate citizen.

The best example of a firm's external stakeholder is a(n) A. government agency that regulates the prices of products manufactured by the firm. B. board member from a wholly-owned foreign subsidiary of the firm. C. shareholder who has invested money in the firm but is not employed by the firm. D. employee of the firm who is responsible for a contract project.

A. government agency that regulates the prices of products manufactured by the firm.

Which of the following factors most effectively contributed to the success of Threadless in comparison to other companies with T-shirt designs, including American Eagle, Old Navy, and Urban Outfitters? A. its reliance on crowdsourcing B. its point-to-point business model C. its hub-and-spoke system D. its shorter distances

A. its reliance on crowdsourcing

The past black swan events in the United States demonstrate that A. managerial actions can affect the economic well-being of large numbers of people around the globe. B. decisions and strategies implemented within a firm will only affect the firm and not the entire industry. C. corporate governance is unnecessary as firms are becoming socially responsible. D. industry effects are more important than firm effects in determining firm performance.

A. managerial actions can affect the economic well-being of large numbers of people around the globe.

Which of the following would be considered a weak stakeholder strategy? A. putting shareholder interests above the interests of other stakeholders B. addressing the concerns of all stakeholders, including employees C. always using fair and ethical practices to satisfy stakeholders D. ensuring that the primary stakeholders achieve their objectives

A. putting shareholder interests above the interests of other stakeholders

Which of the following groups is considered to be the primary stakeholder for public-stock companies? A. suppliers of capital B. employees C. suppliers D. potential customers

A. suppliers of capital

A company wants to determine how industry effects have affected its profitability. Which of the following elements should the company focus on? A. the barriers to entry and exit within the industry B. the pricing method opted by the managers to face competition within the industry C. the brand strategy the managers adopt to establish the firm in the industry D. the strategic position the firm pursues within the industry

A. the barriers to entry and exit within the industry

Silver Screen Cinemas Inc. and Digi Now Inc. are two companies that own and run movie theaters in malls and other commercial areas. While Silver Screen Cinemas Inc. pursues a cost-leadership strategy, Digi Now Inc. adopts a differentiation strategy. Which of the following statements is most likely true of this scenario? A. Silver Screen Cinemas will charge a premium price for its customers, while Digi Now will implement everyday low pricing. B. Digi Now and Silver Screen Cinemas will not be direct competitors to each other, and their customer segments will overlap very little. C. Digi Now will keep its customer service at an acceptable level, while Silver Screen Cinemas will provide superior customer service. D. Silver Screen Cinemas and Digi Now will use a similar approach to create value for customers by attempting to offer everything to everybody.

B. Digi Now and Silver Screen Cinemas will not be direct competitors to each other, and their customer segments will overlap very little.

Which of the following statements accurately describes firm effects? A. They attribute firm performance to the industry in which the firm competes. B. They attribute firm performance to the actions managers take within a chosen industry. C. They refer to the value-creation potential of a large, diversified enterprise. D. They refer to the external circumstances surrounding all the firms in an industry.

B. They attribute firm performance to the actions managers take within a chosen industry.

Which of the following strategies does Twitter need to implement to increase its competitive advantage? A. charge no fee to individual users B. increase its user base C. deliver ads in real time D. allow core users to stay always connected

B. Increase its user base

_____ provides a decision tool that enables a firm to act as a good corporate citizen by allowing its managers to recognize, prioritize, and address the needs of different groups of individuals who take personal interest in the firm's performance and survival. A. Strategy analysis B. Stakeholder impact analysis C. The SWOT analysis D. Strategic positioning

B. Stakeholder impact analysis

_____ is best described as a set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors. A. Behavior modification B. Strategy C. Credo D. Competency management

B. Strategy

Through _____, a firm puts its guiding policy into practice by employing a set of coherent actions. A. strategy control B. strategy implementation C. strategy formulation D. strategy analysis

B. Strategy implementation

Rapida Inc. and Click Inc. are two companies that have been manufacturing typewriters for almost 30 years. Due to the reduced demand for typewriters today, both companies' average return on invested capital is approximately -5 percent. The current industry average is 2 percent. In this scenario, Rapida Inc. and Click Inc. most likely have A. competitive advantage over other firms in their industry. B. competitive parity with each other. C. strategic alliance with each other. D. economies of scope instead of economies of scale.

B. competitive parity with each other.

Which of the following is an example of a firm's external stakeholder? A. employees B. customers C. shareholders D. board members

B. customers

Industry effects describe the underlying _____ structure of the industry. A. demographic B. economic C. psychographic D. ethnographic

B. economic

Stakeholder strategy is an integrative approach to managing a diverse set of stakeholders effectively in order to A. single-mindedly focus on the stockholders alone. B. gain and sustain competitive advantage. C. minimize the joint value created. D. minimize the difference between value creation and cost.

B. gain and sustain competitive advantage.

After a firm has identified its key stakeholders in stakeholder impact analysis, the immediate next step is to A. recognize the opportunities and threats the stakeholders present. B. identify stakeholders' interests and claims. C. formulate a stakeholder strategy. D. address the stakeholders' concerns.

B. identify stakeholders' interests and claims.

In _____, a firm frames a guiding policy to address the competitive challenge. A. strategy control B. strategy implementation C. strategy formulation D. strategy analysis

C. Strategy formulation

Rachel owns a large portion of GM Cube Inc.'s stocks. However, she is not employed by the company. In this scenario, Rachel is the company's A. external stakeholder. B. internal stakeholder. C. creditor. D. customer.

B. internal stakeholder.

A firm is said to gain a competitive advantage when it can A. exceed its own previous performances. B. provide products similar to its competitors, but at lower prices. C. perform at the same level as that of its competitors. D. minimize the difference between value creation and cost.

B. provide products similar to its competitors, but at lower prices.

A core tenet of stakeholder strategy is that a A. firm should isolate its internal stakeholders from its external stakeholders. B. single-minded focus on shareholders alone exposes a firm to undue risks that can threaten the very survival of the enterprise. C. multifaceted exchange relationship with internal and external stakeholders can lead to a firm's competitive disadvantage. D. firm should work toward competitive parity rather than gaining and sustaining a competitive advantage.

B. single-minded focus on shareholders alone exposes a firm to undue risks that can threaten the very survival of the enterprise.

BlueStainless Corp. has been able to gain and sustain a competitive advantage due to its strong relationship with its employees, customers, suppliers, and local communities. The company believes in lifetime employment and ensures that its employees grow along with the company. Investors are more than satisfied with the returns on their investments. Also, 3 percent of the company's profit is spent on community development. With initiatives like these, customers feel privileged to associate themselves with BlueStainless products. This scenario best illustrates the implementation of a A. strategic analysis. B. stakeholder strategy. C. wild card event. D. black swan event.

B. stakeholder strategy.

In the United States, which of the following was born out of dissatisfaction with the capitalist system in 2011? A. the Sarbanes-Oxley Act B. the Occupy movement C. the Tea Party movement D. the Taft-Hartley Act

B. the Occupy movement

Which of the following was a key driver in the Occupy movement of 2011? A. the need for a capitalist economic system B. the issue of income disparity C. the need to reduce government intervention in businesses D. the issue related to dumping of cheap foreign products

B. the issue of income disparity

Differentiation

Beach Grub is a chain of "fast casual" restaurants that sells its menu items at higher prices than its competitors. Yet, the restaurant has a large customer base due to its wide product portfolio and superior customer service. Which of the following generic business strategies has Beach Grub adopted in this scenario?

_____ are incidents that describe highly improbable but highly impactful events. A. Miracle events B. Wild card events C. Black swan events D. Fat tail risk events

C. Black swan events

Which of the following scenarios best illustrates a good stakeholder strategy? A. VP Inc. follows a strategy in which maximization of the shareholder's wealth is the primary concern of the managers. B. Carrvero Inc. ensures that its employees are paid the least in the industry so that its external stakeholders can get the best price. C. PA Corp. distributes only 70 percent of its annual profit after taxes to shareholders, while the remaining is distributed among employees and the local community, and invested for further research. D. Gen Pharma Corp. ensures that it fully exploits free natural resources, so that most of its profits go to shareholders in the form of dividends.

C. PA Corp. distributes only 70 percent of its annual profit after taxes to shareholders, while the remaining is distributed among employees and the local community, and invested for further research.

_____ is best described as an integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage. A. Supply chain management B. Integrated technology management C. Strategic management D. Inventory management

C. Strategic management

Which of the following is an implication of all firms in an industry pursuing a low-cost position through application of competitive benchmarking? A. No firm would face direct competition from others in the industry; hence, profit potential would be high. B. Each firm would be catering to a different customer segment. C. The firms would eventually have no resources to invest in product and process improvements. D. Each firm would be in a better position to gain a competitive advantage.

C. The firms would eventually have no resources to invest in product and process improvements.

Which of the following statements about a firm's stakeholders is true? A. Irrespective of whether the stakeholders are internal or external, the claims and interests of all stakeholders are the same. B. As the legal owners, employees in a public-stock company have the most legitimate claim on a company's profits. C. Within stakeholder groups there can be significant variation in the power a stakeholder may exert on a firm. D. Only internal stakeholders make specific contributions to a firm, which in turn provides different types of benefits to the external stakeholders.

C. Within stakeholder groups there can be significant variation in the power a stakeholder may exert on a firm.

Which of the following scenarios illustrates a firm that has a sustainable competitive advantage? A. Jamison Inc. generated revenue of $300,000 this financial year, which is close to the industrial revenue average of $320,000. B. CR Inc. almost doubled its sales to 9,000 units this year compared to its previous year's sales of 5,000 units, though the industry average is 10,000 units. C. Zhang Corp. was able to hold its market share of 68 percent in the social networking industry for more than three years. D. Peak Inc. was able to outperform its competitors with its new production system, in terms of revenue, for a brief period of four months.

C. Zhang Corp.

Which of the following best qualifies as a firm's internal stakeholder? A. an auditor assigned to the firm by a federal government agency B. a labor union with whom the firm's employees can affiliate C. a manager taking care of the firm's operations in a foreign market D. a competitor manufacturing the same products as that of the firm

C. a manager taking care of the firm's operations in a foreign market

When the strong dictatorial rule in Backenstein unexpectedly collapsed due to the shocking death of the royal family in an explosion, the nation's economy experienced drastic changes. The laws became more restrictive, the country lost many locally produced resources and products, and the distribution of wealth became inequitable. The unexpected event that led to these changes can best be described as a(n) _____ event. A. extinction B. wild card C. black swan D. miracle

C. black swan

The board at TriCom Manufacturing Corp. has decided to allocate 20 percent of the company's shares to its workforce, at a discounted price. Apart from being a valued investment, the plan will allow the employees to take personal responsibility for the firm's performance. Which of the following employee incentive schemes does this best illustrate? A. employee provident fund B. employee gratuity fund C. employee stock ownership plan D. employee emergency loan program

C. employee stock ownership plan

The interaction between a firm and its diverse internal and external stakeholders is best described as a(n) A. ergonomic relationship. B. cartel arrangement. C. exchange relationship. D. fiduciary responsibility.

C. exchange relationship.

Pink Couture Inc. and Pink Blush Inc. are two companies in the apparel industry. While Pink Couture Inc. focuses on providing unique product features and superior customer service, Pink Blush Inc. focuses on low prices and minimal customer service. Both companies have been able to gain a competitive advantage. This is most likely because the companies have A. executed integrated strategies. B. entered into a cartel arrangement. C. pursued distinct strategic positions. D. engaged in direct imitation and substitution.

C. pursued distinct strategic positions.

As the legal owners, _____ have the most legitimate claim on a company's profits. A. creditors B. employees C. shareholders D. board members

C. shareholders

Which of the following forces tends to be more important in determining a firm's performance? A. the underlying economic structure B. the entry barriers in the industry C. the actions of managers within the firm D. the number and size of other firms in the industry

C. the actions of managers within the firm

Which of the following forces is most closely related to industry effects within the automobile industry? A. the actions taken to improve employee productivity within a firm B. the human resource strategy managers adopt to acquire the best talent from the industry C. the types of products and the services offered within the industry D. the decisions made within a firm regarding pricing of a product in the market

C. the types of products and the services offered within the industry

For a firm that operates in an industry where competition is high, which of the following practices will result in inferior performance? A. choosing a distinct but different strategic position in the industry B. working toward increasing the difference between value creation and cost C. trying to be everything to everybody by combining different competitive strategies D. focusing on creating value for customers rather than destroying rivals

C. trying to be everything to everybody by combining different competitive strategies

Which of the following statements about strategy is not true? A. Grandiose statements of desire, on their own, are not strategy. B. Strategy is as much about deciding what not to do, as it is about deciding what to do. C. Strategy is about creating superior value, while containing the cost to create it. D. Operational effectiveness and competitive benchmarking should be treated as strategy.

D. Operational effectiveness and competitive benchmarking should be treated as strategy.

Which of the following is not a stakeholder attribute that managers consider during stakeholder impact analysis? A. a stakeholder's power B. a stakeholder's legitimate claim C. a stakeholder's urgent claim D. a stakeholder's liquidity

D. a stakeholder's liquidity

Underperformance relative to other firms in the same industry or the industry average results in a(n) _____ for a firm. A. sustainable competitive advantage B. increased power distance C. diseconomies of scope D. competitive disadvantage

D. competitive disadvantage

Organic Food Inc., a multinational company, relies on its media partner Radio Plus to regularly advertise its offers, sales, and new products. Radio Plus is invested in this relationship because it generates most of its revenue from advertising Organic Food's products. In this scenario, Radio Plus is Organic Food Inc.'s A. stockholder. B. workforce. C. internal stakeholder. D. external stakeholder.

D. external stakeholder.

Sun Inc., a vendor, regularly supplies pallets to Octangle Corp. for its shipping business. Therefore, Sun Inc. is Octangle Corp.'s A. internal stakeholder. B. stockholder. C. shareholder. D. external stakeholder.

D. external stakeholder.

State-level government agencies that check whether firms are meeting statutory safety measures in their production units are considered to be the firms' A. stockholders. B. shareholders. C. internal stakeholders. D. external stakeholders.

D. external stakeholders.

The first step in stakeholder impact analysis involves A. formulating a stakeholder strategy to balance the different needs of various stakeholders. B. identifying the opportunities and threats the stakeholders present. C. describing the economic, legal, ethical, and philanthropic responsibilities of the firm toward the society. D. identifying the stakeholders that currently have, or potentially can have, a material effect on a company.

D. identifying the stakeholders that currently have, or potentially can have, a material effect on a company.

Due to several black swan events in the past, the A. shareholders of public companies have become more confident in investing their resources in businesses. B. need for corporate governance and transparency has reduced within various industries. C. nations around the globe have explicitly appreciated and accepted capitalism as an economic system. D. implicit trust relationship between the corporate world and society at large has deteriorated.

D. implicit trust relationship between the corporate world and society at large has deteriorated.

Which of the following is not an example of a software company's external stakeholder? A. creditors B. customers C. alliance partners D. project managers

D. project managers

Jake's Taxi Service is a new entrant to the taxi industry. It has achieved success by staking out a unique position in the industry. How did Jake's Taxi Service mostly likely achieve this position? A. providing long-distance cab fares at a higher rate than competitors; servicing a larger area than competitors B. providing long-distance cab fares at a lower rate than competitors; servicing a smaller area than competitors C. providing long-distance cab fares at a higher rate than competitors; servicing the same area as competitors D. providing long-distance cab fares at a lower rate than competitors; servicing the same area as competitors

D. providing long-distance cab fares at a lower rate than competitors; servicing the same area as competitors

In a firm, a strategist's job should be to A. limit the participation of external stakeholders—customers and suppliers—in value creation. B. isolate the firm's internal stakeholders from its external stakeholders. C. focus solely, in a single-minded manner, on maximizing shareholder wealth. D. understand the complex web of exchange relationships among different stakeholders.

D. understand the complex web of exchange relationships among different stakeholders.

If a company wants to gain a competitive advantage in a highly competitive industry, it should ideally A. execute an integrated cost-leadership and differentiation position. B. copy the strategies of other firms through competitive benchmarking. C. provide goods or services similar to its competitors at higher prices. D. stake out a unique position within the industry.

D. stake out a unique position within the industry.

Javier, a retired CEO, invests capital in a start-up company that creates budgeting software. He mentors the entrepreneur and the employees of the company because he wants the company to perform well and survive in the market. Thus, Javier is the start-up company's A. headhunter. B. category captain. C. employee. D. stakeholder.

D. stakeholder

FindFor Inc. is an e-commerce retail firm that sells a variety of merchandise online. Through services like cash on delivery, easy return, and online tracking, the company has created more customer value than its competitors (brick-and-mortar businesses) at the same price. Also, the company's costs are substantially low due to minimal investment in operation and administration. In this scenario, FindFor Inc. has most likely been able to provide superior value and cost control through A. strategic parity. B. strategic profiling. C. strategic liquidation. D. strategic positioning.

D. strategic positioning

Blue Bird Products Inc. (BBP) is a large conglomerate. The human resources department of its telecom division has decided to reduce its employee turnover by encouraging internal promotions. Which of the following strategies does this scenario best illustrate? Corporate strategy Business strategy Functional strategy Grand strategy

Functional strategy

Pioneer Pharma Inc. and GH Medicines Corp. are two competing firms in the pharmaceutical industry. While Pioneer Pharma Inc.'s vision is "to be a preeminent drug manufacturer in the industry," GH Medicines Corp.'s vision is "to make good health a reality for everyone around the world." Which of the following is an implication of these different visions? GH Medicines's vision is more product-oriented than the vision of Pioneer Pharma. Pioneer Pharma is more likely to have a positive relationship between its vision and firm performance than GH Medicines. Pioneer Pharma's vision is more long-term and futuristic than GH Medicines's vision. GH Medicines will be more flexible than Pioneer Pharma when adapting to changing environments.

GH Medicines will be more flexible than Pioneer Pharma when adapting to changing environments.

delivers low-cost products and services to a specific, narrow part of the market.

In a focused cost-leadership strategy, a firm:

Blue Ocean

In a successful ________ strategy, the trade-offs between differentiation and low cost are reconciled.

Gerald has been an employee with GeoFuture Inc. for 15 years. He started with an entry-level job, and today he is a manager of an entire division. Over the years, Gerald has acquired a reputation for doing the right things in the company. Hence, as an efficient leader, he is capable of effectively communicating and motivating his subordinates to work toward the company's vision and mission. According to the Level-5 leadership pyramid, which is the highest level of leadership Gerald has reached so far? Level 5 Level 4 Level 3 Level 2

Level 4

Marigold's organizational structures do not align with the vision.

Marigold Servers, a web services firm, has experienced a 7% decline in revenues in consecutive quarters. In an effort to reduce operating costs, managers reduced the customer service staff from 12 employees to 6. Management also enlisted the remaining employees to help produce a new company vision: to give customers of all budgets a customization, stress-free web hosting experience. What is wrong with this scenario?

value drivers

Product features, customer service, and complements are all examples of important:

long-term oriented

Strategic commitments are actions that are:

Which of the following statements is true of strategic initiatives? Strategic initiatives can be the result of a response to external trends or come from internal sources. When lower-level employees are less empowered, the possibility of strategic initiatives is higher. Strategic initiatives result from top-down planning by executives and not through a bottom-up process. Random events and accidental happenstances reduce the possibility of strategic initiatives in organizations.

Strategic initiatives can be the result of a response to external trends or come from internal sources.

Patterson Foods Inc. was the first company to start selling energy bars in its country—a product that gained popularity among diverse groups. Soon, other companies started to sell their own brands of energy bars, thereby giving Patterson Foods ample competition. In response, Patterson Foods decided to limit its variety of energy bars to only four. However, it ensured that these four varieties were low in calories and low in cost. With this innovation, Patterson Foods Inc. consistently outperformed its competitors for ten years. In this scenario, Patterson Foods Inc. maintained a _____ through its innovative strategy. A. balanced scorecard B. fiduciary responsibility C. consistent power position D. sustainable competitive advantage

Sustainable competitive advantage

In a large company, who is most responsible for devising the corporate strategy? The CEO of the company The lower-level employees in the company The head of the production department in the company The human resource manager in the company

The CEO of the company

define a firm's vision, mission, and values.

The first step to gain and sustain a competitive advantage is to:

Which of the following strategies best illustrates a functional strategy? The CEO of Dawn Companies Inc. has decided that the company will be entering the Asian market. The general manager of a product division of Aster Products Inc. has decided that 30 percent of the division's annual profits will be invested in research and development. The regional manager for the consumer electronics division of Dawson & Co. has decided that the division will pursue backward integration to save costs. The production manager at the apparel division of Style Culture Co. has decided that the department will hire contract workers for three months to meet the temporary demand.

The production manager at the apparel division of Style Culture Co. has decided that the department will hire contract workers for three months to meet the temporary demand.

Which of the following is a customer-oriented vision? To be the most progressive insurance company To be the best automobile company in the world To enable people throughout the globe to identify their capabilities To manufacture innovative products through continuous learning

To enable people throughout the globe to identify their capabilities

competitive disadvantage

Under-performance relative to other firms in the same industry or the industry average results in a(n) ________ for a firm.

the increase in value creation exceeds the increase in costs.

Value drivers contribute to a firm's competitive advantage only if:

Which of the following best describes a Level-5 manager in the Level-5 leadership pyramid? Gina is an employee who just started her career GL Inc.; she has already been appreciated for her knowledge and skills in the new company. Derek is an employee at One Triangle Inc.; he has helped his team achieve their targets by contributing to the team's efforts. Harry is part of the marketing team at JB Corp.; he has been given the charge of managing a team of three based on which he will be promoted to a manager's position next month. Walter is the CEO of Red Autos Inc.; he has helped his company in gaining and sustaining a competitive advantage through ethical decision making.

Walter is the CEO of Red Autos Inc.; he has helped his company in gaining and sustaining a competitive advantage through ethical decision making.

stuck in the middle

When a blue ocean strategy goes bad, a firm has neither a clear differentiation nor a clear cost-leadership profile. This situation is referred to as:

a set of coherent actions to implement the firm's guiding policy

Which of the following is an element of good strategy?

Strategy

________ is best described as a set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors.

Economies of scale

________ is best described as decreases in cost per unit as output increases.

Minimum efficient scale

________ is best described as 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 through economies of scale.

Organizational values help individuals make choices that are: legal but unethical. both illegal. both ethical and effective in advancing a company's goals. ethical but ineffective in achieving long-term success.

both ethical and effective in advancing a company's goals.

In the top-down strategic planning approach, all strategic intelligence and decision-making responsibilities rest primarily on the _____. functional managers chief executive officer external stakeholders general manager

chief executive officer

Any unplanned strategic initiative undertaken by mid-level employees of their own volition is a(n) _____. dominant strategic plan unrealized strategy emergent strategy intended strategy

emergent strategy

Strategic flexibility is achieved when managers: choose to keep their vision statements more product-oriented rather than customer-oriented. respond to reality changes by activating alternate dominant plans or modifying the old plan. implement static top-down strategic planning approach to the development of strategy. overlook pessimistic future scenarios and only prepare for optimistic futures.

respond to reality changes by activating alternate dominant plans or modifying the old plan.

The executives at Red Couture Inc. are developing strategic plans to address plausible future situations like rise in the prices of cotton and synthetic fabrics by 20 percent, appreciation in the value of dollar, increase in the cost of labor by 30 percent, and increase in demand for the company's products. By doing so, the company will be well-prepared with its planned responses if any of these situations occurs in the future. Thus, Red Couture is employing _____ as the approach to the development of strategy. scenario planning top-down strategic planning reverse engineering pattern recognition

scenario planning

Top-down strategic planning as an approach to the strategic management process will be most effective when the: environment is constantly changing. size of the firm is large. probability of black swan events is high. top management wants to decentralize decision making.

size of the firm is large.

A traditional top-down strategic planning process typically begins with: employees at the operational level identifying problems within an organization. functional managers formulating functional strategies for their respective departments. strategic leaders adjusting a company's vision and mission based on environmental analysis. employees who have close contact with customers taking autonomous actions.

strategic leaders adjusting a company's vision and mission based on environmental analysis.

As the CEO of a conglomerate, Juana Mark exhibited her strong commitment toward the company's core value that customer's well-being is more important than profit when she decided to liquidate the company's tobacco subsidiary. The tobacco brand sold by her company was a major revenue earner in lesser-developed nations. However, Juana believed that her company had to be responsible toward the society. In this scenario, Juana has demonstrated _____. strategic leadership intrapreneurship Machiavellianism individualism

strategic leadership

Strategic thinking is different from strategic planning in that: strategic thinking includes all types of information sources while strategic planning does not. strategic thinking relies more on hard data than strategic planning. strategic thinking is regimented and confining, whereas strategic planning is more flexible. strategic thinking can create an illusion of control, whereas strategic planning avoids this.

strategic thinking includes all types of information sources while strategic planning does not.

As a part of strategy formulation, corporate strategy concerns questions relating to: why we should compete. how to compete. where to compete. how to implement the business strategy.

where to compete.