MGMT Midterm

Buyers are more likely to be powerful relative to the firms from which they purchase goods and services if: 1) there are relatively few firms supplying the industry compared to the number of buyers. 2) the good or service purchased by the buyers represents a high percentage of the buyer's costs. 3) the industry's goods or services are highly differentiated. 4) buyers face high switching costs in changing vendors. 5) the good or service is of significant importance to the quality or price of the buyer's offerings.

2) the good or service purchased by the buyers represents a high percentage of the buyer's costs.

Which of the following segments of PESTEL analysis includes cultural trends such as attitudes toward obesity and consumer activism? 1) Political 2) Economic 3) Social 4) Technological 5) Environmental

3) Social

Rivalry between competitors of an industry tends to be fierce when: 1) exit barriers in the industry are low. 2) fixed costs in the industry are low. 3) competitors are not differentiated from each other. 4) competition is based on the uniqueness of the industry's offerings. 5) the growth rate of demand for the industry's offerings is high.

3) competitors are not differentiated from each other.

New entrants are more likely to join an industry if: 1) differentiation among existing competitors is high. 2) access to distribution channels is limited. 3) existing competitors lack economies of scale. 4) capital requirements to enter the industry are high. 5) expected retaliation from existing competitors is high.

3) existing competitors lack economies of scale.

Michael Porter's five forces analysis is an important tool: 1) that considers a firm's strengths and weaknesses along with the opportunities and threats that exist in the firm's environment. 2) for executives to analyze strategic groups in order to understand gaps in the industry that represent untapped opportunities. 3) for analyzing how much profit potential exists in an industry. 4) for evaluating profit potential of an organization's various business units or product lines. 5) for organizing factors within the general environment and identifying how these factors influence industries and the firms within them.

3) for analyzing how much profit potential exists in an industry.

According to the resource-based theory, _____ of an asset is one of the four qualities that makes it a strategic resource for a business. 1) availability 2) dynamism 3) rarity 4) tangibility 5) competitiveness

3) rarity

Buyers are more likely to be powerful relative to the firms from which they purchase goods and services if: 1) there are relatively few firms supplying the industry compared to the number of buyers. 2) the good or service purchased by the buyers represents a negligible percentage of the buyer's costs. 3) the industry's goods or services are highly differentiated. 4) buyers face little or no switching costs in changing vendors. 5) the good or service is of significant importance to the quality or price of the buyer's offerings.

4) buyers face little or no switching costs in changing vendors.

New entrants are more likely to join an industry if: 1) differentiation among existing competitors is high. 2) access to distribution channels is limited. 3) switching costs for consumers are high. 4) capital requirements to enter the industry are low. 5) expected retaliation from existing competitors is high.

4) capital requirements to enter the industry are low.

PESTEL reflects the names of the six segments of the general environment: political, _____, environmental, and legal. 1) ecological, strategic, technical 2) ecological, social, technological 3) economic, strategic, technical 4) economic, social, technological 5) ecological, strategic, technological

4) economic, social, technological

Suppliers are more likely to be powerful relative to the firms to which they sell their goods and services if: 1) differentiation among existing suppliers is high. 2) access to distribution channels is limited. 3) existing suppliers lack economies of scale. 4) the suppliers' industry is highly concentrated. 5) cost advantages independent of size are negligible.

4) the suppliers' industry is highly concentrated.

The legal system is the least favored choice of firms for protecting their _____. 1) patents 2) copyrights 3) trademarks 4) trade secrets 5) inventor rights

4) trade secrets

Which of the following is one of the five forces of Michael Porter's five forces analysis? 1) Economic elements 2) Governmental regulations 3) Cultural and social trends affecting an industry 4) Geographic origin of an industry 5) Suppliers to an industry

5) Suppliers to an industry

Concentrated industries differ from fragmented industries in that in concentrated industries: 1) exit barriers for businesses are unusually high. 2) growth rate of demand for the industry's offerings is usually low. 3) competitors are well-differentiated from each other. 4) fixed costs of managing a business are very high. 5) businesses tend to keep their competition rather polite.

5) businesses tend to keep their competition rather polite.

The likelihood of new entrants joining an industry is low if access to distribution channels is limited because: 1) new entrants struggle to match incumbents' prices. 2) this discourages customers from buying a new entrant's offerings. 3) new entrants struggle to gather enough cash to get started. 4) each incumbent has a group of loyal customers that enjoy its unique features. 5) new entrants struggle to get their offerings to customers.

5) new entrants struggle to get their offerings to customers.

Buyers are more likely to be powerful relative to the firms from which they purchase goods and services if: 1) there are relatively few firms supplying the industry compared to the number of buyers. 2)the good or service purchased by the buyers represents a negligible percentage of the buyer's costs. 3) the industry's goods or services are highly differentiated. 4) buyers face high switching costs in changing vendors. 5) the good or service is of limited importance to the quality or price of the buyer's offerings.

5) the good or service is of limited importance to the quality or price of the buyer's offerings.

Which of the following is NOT included in Porter's Five Forces Framework? A. Threat of substitutes B. Threat of government action C. Bargaining power of suppliers D. Bargaining power of buyers (customers) E. All are included in the framework

B. Threat of government action

Creating a new, untapped market rather than competing with rivals in an existing market is a (an) _____.

Blue Ocean Strategy

What do the letters C - A - G - E stand for in the CAGE - Distance Framework?

C = Cultural Distance A = Administrative Distance G = Geographic Distance E = Economic Distance

"Given the business (es) we are in, how should we compete?" is the question asked at the ____ level.

Competitive (business) strategy

If Microsoft bought a chain of food retailers such as Piggly-Wiggly, it would be an example of a __.

Conglomerate Diversification

What are the three levels of strategy, and what questions are asked at the top two levels?

Corporate level: What business(es) are we in and which should we be in? Competitive level: (a.k.a. business level or industry level) -Given the business (es) we are in, how should we compete? Functional level - what must we do at the functional level in order to implement chosen strategies? (e.g. resource acquisition, organizational structure, marketing, etc.)

Which generic strategy is usually associated with the discount retailers such as Wal-Mart?

Cost Leadership Strategy

A generic strategy aimed at emphasizing the uniqueness or superiority of products and services is_?

Differentiation Strategy

The sale of one of a firm's SBUs to a competitor, and that SBU continues to operate is a _______.

Divestiture

Difficulties encountered by trying to "reposition" a brand in the market (e.g. moving "upscale") are examples of a (an) _______?.

E. Mobility barrier

What are the four strategies in the "four actions framework" associated with Blue Ocean Strategies? In other words, what aspects of our strategy can we ______, _____, _____, and _____ to implement a blue ocean strategy?

Eliminate, Reduce, Raise, and Create

If a company builds a new manufacturing plant dedicated to producing shoes for a region, and later decides to get out of that region but can't find a buyer for the plant, the manufacturing plant might be viewed as a (an) _____.

Exit Barrier

Marketing efforts to increase sales of existing products in existing markets is which concentration (intensive) grand strategy?

F. Market Penetration

When a shoe manufacturer opens a company-owned retail store, it is an example of ________.

Forward Vertical Integration

The name given to Michael Porter's group of strategies used at the competitive (business) strategy level.

Generic Strategies

The formation of HP/Compaq and Daimler/Chrysler are examples of which grand strategy?

Horizontal Integration

What are the four categories of grand strategies identified in class?

Integration (Forward Vertical, Backward Vertical, Horizontal) Intensive* (Market development, product development, market penetration) Diversification (concentric and conglomerate) Defensive** (retrenchment, divestment, liquidation)

If Dell Computer were to acquire Intel, it would best be described as an example of ______.

J. Backward Vertical Integration

A situation in which a firm faces the same rival in more than one market is ________.

K. multipoint competition

A sign in a store window reads, "going out of business—everything must go" is probably an example of which grand strategy?

Liquidation

Exporting products made in the US to new foreign markets is a basic example of which concentration (intensive) strategy?

Market Development

When existing rivals in an industry to not act aggressively because of fear of retaliation, it is ______.

Mutual forbearance

Sony's launches of PlayStation 2, then PS3, then PS4, is an example of which concentration (intensive) strategy?

O. Product Development

Dell Computer's initial decision to start selling LCD wide-screen TVs is an example of _______.

Related Diversification

What are the forces included in Porter's 5+1 forces model (the sixth force was discussed in class)

Sixth Force: Threat From Complementary Products

A company uses outside suppliers to provide services that it could perform itself. (e.g. a firm might contract a professional cleaning company to come in on a regular basis to clean offices.)

W. Outsourcing

A company produces fat-free and low-fat snacks under the brand name Healthy Bites. The firm decides to set up counters in the retail stores which stock its products with representatives who will promote the products and explain its health benefits to consumers. The firm aims to increase the sale of Healthy Bites products in these stores. In this example, which of the following best describes the company's strategy? a. Market penetration b. Product development c. Related diversification d. Horizontal integration e. Backward vertical integration

a. Market penetration

31. Which of the following models is used for analyzing the general external environment? a. PEST (or PESTEL) b. Porter's Five Forces c. Ansoff's matrix d. SWOT analysis e. none of the above.

a. PEST (or PESTEL)

23. The internet boom of the 1990s is an example of: a. Shumpterian Shock b. Dynamic Capability c. Environmental Determinism d. a Gausian Principle e. Causal Ambiguity

a. Shumpterian Shock

A key learning point from the Robin Hood case discussion is: a. all of these are key learning points from the Robin Hood case discussion b. An organization's alternative courses of action are strongly influenced by its external environment c. A broadly defined mission (organizational) yields more opportunities than a narrowly defined mission. d. What to do when an organization faces increasing profits and decreasing revenues

a. all of these are key learning points from the Robin Hood case discussion

Cigarette makers R.J. Reynolds (RJR) and Philip Morris square off not only in the United States but in many countries around the world. This is an example of: a. multipoint competition b. global co-opetition c. bricolage d. focused rivalry e. outsourcing

a. multipoint competition

Quattro is a pizza shop that delivers pizzas without any extra charge. It plans to refund the entire amount of the order in case the pizza is not delivered within a period of thirty minutes from the time when the order is placed. After two years it has stopped the policy of refunding any money in case of a delay of more than thirty minutes. The fact that it stopped the policy of refunds in case of a delay of more than thirty minutes is an example of a _____ strategy a. non-realized b. make over c. marked d. pre-termed

a. non-realized

The "triple bottom line" is an approach to assessing performance that emphasizes concern for: a. people, planet, and profit b. product, position, and performance c. structure, conduct and performance d. product, place and profit e. none of these

a. people, planet, and profit

Marty's, a clothing company, has a number of outlets which are owned and managed by private individuals. These outlets are allowed to use the brand name and products of Marty's after paying a fee to the company. They also pay a part of their revenues to the clothing line. The part of the revenues paid by the outlets to Marty's is referred to as: a. royalty fee b. franchise fee c. trademark fee d. agency fee

a. royalty fee

28. Strategy formulation, strategy implementation, and ____ are the steps (or phases) in the strategic management process. a. strategy evaluation b. strategic planning c. decision-making d. positioning e. strategy visioning

a. strategy evaluation

29. The main question asked at corporate-level strategy is: a. what business(es) are we in/should we be in? b. given the business(es) we are in, how should we compete? c. where are we now? d. where do we want to be? e. how do we get there?

a. what business(es) are we in/should we be in?

An automobile manufacturing company wants to be the first company in the world to launch a car that would require no human intervention to run on the road. It wants to do so by year 2020. The task presents a challenge to the engineering skills of the organization. The fact that the task presents a challenge to the organization reflects the _____ dimension of a goal. a. measurable b. time-bound c. realistic d. aggressive

d. aggressive

27. Perceptual (or position) mapping is used to: a. identify strategic groups of competitors b. identify "gaps" in the market c. identify industry competitors' position in the market d. all of the above e. none of the above

d. all of the above

26. An approach to assessing performance that targets manager's attention on four areas: (1) financial, (2) customer, (3) internal business process, and (4) learning and growth is a tool called _______? a. competitive profile matrix b. SWOT analysis c. critical success factor analysis d. balanced scorecard e. QUEST analysis

d. balanced scorecard

As discussed in class, which of Rumelt's criteria asks whether a strategy is in harmony with trends in the company's external environment? a.consistency b. responsibility c. feasibility d. consensus

d. consensus

Roomz, a mid-range hotel, used to provide only food and accommodation facilities. It soon realized that most of its customers are foreign tourists who constantly ask for directions and advice on places to visit. The hotel then decided to start a travel desk which would help tourists select and visit places of historical and cultural significance. This is an example of a(n) _____ strategy. a. divergent b. submerged c. intended d. emergent

d. emergent

_________is a key concept that describes executives who craft strategies in the hopes of doing something new to exploit opportunities that other organizations cannot exploit. a. visioning b. hubris c. shrewdness d.entrepreneurial orientation

d. entrepreneurial orientation

24. A theoretical perspective that contends that organizations are limited in their ability to adapt to the conditions around them is: a. enactment b. resource-based view c. institutional theory d. environmental determinism e. transaction-cost economics

d. environmental determinism

The textbook characterizes CEOS as hidden gems, silent killers, scoundrels, and ________ a.sinners b.saints c. demons d. none of these e. angels

d. none of these

A coffee chain was losing its customers to its competitors, and wanted to increase its sales. Therefore it started offering complimentary pastries with every cup of coffee, to outwit its competitors. Soon, the company registered an increase in its sales. This is an example of a strategic: a. pattern b. perspective c. position d. ploy

d. ploy

What are the three main categories of financial performance measures (ratios) as explained in the textbook? a. income statement, balance sheet, cash flow b.ROA, ROE, ROI c. people, planet, profit d. profitability, liquidity, leverage

d. profitability, liquidity, leverage

A company's ______ delineates management's aspirations for the business providing a panoramic view of "where we are going" and a convincing rationale for why this makes good business sense for the company. a. SWOT analysis b. mission statement c. core values statement d. strategic vision

d. strategic vision

GE is know as a diversified conglomerate, operating in a number of different industries, including Power, Aviation, Healthcare, Transportation, etc. In 2016 GE sold its Appliances division to Haier. From GE's perspective, this is an example of a _______ strategy, and it is also an example of a ______ strategy decision. a.Diversification; business-level b.Liquidation; Functional-level c.Vertical Integration; Corporate-level d.Divestment; Corporate-level None of the above

d.Divestment; Corporate-level

A _________ brand is a lower-end brand that a firm introduces to try to protect the firm's market share without damaging the firm's existing brands. (Example: Annheuser-Busch introduced Busch beer to protect Budweiser from losing market share to lower-priced competitors.) a.Mass b.Retro c.Defender d.Fighting e. niche

d.Fighting

Forces that inhibit movement of firms from one strategic group to another are known as: a.Entry Barriers b.Exit Barriers c.Concentration Barriers d.Mobility Barriers e.none of these

d.Mobility Barriers

What is the name given to the figure shown in the above diagram? a.Grand strategies model b.Ansoff's Matrix c.Schumpeter's FHTP model d.Competitive Profile Matrix e.None of the above

e. None of the above...it is Porter's Value Chain

Which of the following components required for creating best value supply chains can be achieved through the use of buffers? 1) Agility 2) Strategic supply chain management 3) Alignment 4)Adaptability 5) Operations

1) Agility

_____ is one of the five forces of Michael Porter's five forces analysis. 1) Competitors in an industry 2) Governmental regulations 3) Economic elements 4) Geographic origin of an industry 5) Cultural and social trends affecting an industry

1) Competitors in an industry

_____ are legal decrees that protect inventions from direct imitation for a limited period of time. 1) Patents 2) Copyrights 3) Trademarks 4) Trade secrets 5) Inventor rights

1) Patents

Which of the following is an example of a patent? 1) Richard James's Slinky 2) McDonald's golden arches 3) The Nike swoosh 4) The formulation of Coca-Cola 5) Original artistic creations, like books

1) Richard James's Slinky

Rivalry between competitors of an industry tends to be fierce when: 1) exit barriers in the industry are high. 2) fixed costs in the industry are low. 3) competitors are differentiated from each other. 4) competition is based on the uniqueness of the industry's offerings. 5) the growth rate of demand for the industry's offerings is high.

1) exit barriers in the industry are high.

The likelihood of new entrants joining an industry is low if existing competitors enjoy economies of scale because: 1) new entrants struggle to match incumbents' prices. 2) this discourages customers from buying a new entrant's offerings. 3) new entrants struggle to gather enough cash to get started. 4) each incumbent has a group of loyal customers that enjoy its unique features. 5) new entrants struggle to get their offerings to customers.

1) new entrants struggle to match incumbents' prices.

_____ analysis is an important tool that executives can rely upon to organize factors within the general environment and identify how these factors influence industries and the firms within them. 1) PESTEL 2) SWOT 3) Porter's 4) BCG matrix 5) Five forces

1)PESTEL

Which of the following is an example of forward vertical integration? 1) A start-up company created by an entrepreneur enters an industry 2) A supplier firm chooses to enter its customers' business 3) A foreign firm plans to enter a new geographic area 4) A buyer firm decides to enter its suppliers' business 5) A local firm diversifies itself by entering a new industry

2) A supplier firm chooses to enter its customers' business

Which of the following is one of the four components required for creating best value supply chains? 1) Strategic value chain management 2) Adaptability 3) Technology 4) Diversification 5) Operations

2) Adaptability

_____ is one of the five secondary activities that value chains include. 1) Inbound logistics 2) Technology 3) Operations 4) Service 5) Marketing and sales

2) Technology

When a buyer decides to enter its suppliers' business, the strategy is referred to as _____. 1) forward horizontal integration 2) backward vertical integration 3) horizontal diversification 4) backward horizontal integration 5) forward vertical integration

2) backward vertical integration

When unemployment rises, discretionary income plummets. That hurts businesses selling costly but non-essential goods. This example represents the _____ segment of PESTEL analysis. 1) political 2) economic 3) social 4) technological 5) environmental

2) economic

Comfort Shoes Inc. is a firm that manufactures orthopedic shoes and sells them at retail stores in New York. Based on the popularity of the shoes, the firm decides to expand operations to other geographic regions. In this example, Comfort Shoes Inc. uses which of the following strategies? a. Market penetration b. Product development c. Related diversification d. Market development e. Horizontal integration

d. Market development

As discussed in class, the main question (s) asked at corporate-level strategy is (are): a. Given the business we are in, how should we compete? b. How do we get a sustainable competitive advantage? c. Should we follow a differentiation, cost leadership, or focus strategy? d. What business are we in? What business should we be in?

d. What business are we in? What business should we be in?

As discussed in class, Rumelt's criteria for strategy evaluation are: feasibility, consistency, consonance, and___ a. endurance b. profitability c. sustainability d. advantage

d. advantage

As represented in Bartlett & Ghoshal's model, one of the main strategic issues that firms operating in international markets must address is: a.market pressures to localize (adapt) products/services and competitive pressures to lower costs by standardizing b. cultural differences between managers from the home country and mangers from the host country c.whether to follow home country (ethnocentric) host country (polycentric) human resource laws d.understanding the reasons why governments intervene in foreign trade and how to overcome these barriers and incentives e. none of the above are identified as issues in Bartlett & Ghoshal's model

a.market pressures to localize (adapt) products/services and competitive pressures to lower costs by standardizing

. A health drink company is known for launching drinks with flavors which are different from what are offered in the market. It regularly indulges in experimentation to come up with new and exotic flavored drinks. It is also able to charge prices that aref higher than what other health drink companies charge. What advantage would the company enjoy because of the strategy it follows? a. It can depend on its ability to reduce the price to drive competition out of the market. b. It has an ability to obtain premium prices from customers. c. Customers always prefer a product with features rather than a cheaper alternative. d. It does not need to spend significant funds on advertising. e. Customers are always eager to pay extra to obtain the unique features that a firm is trying to build its strategy around.

b. It has an ability to obtain premium prices from customers.

25. A "3 firm concentration ratio of 80%" would mean: a. The industry is highly fragmented b. The industry is highly concentrated c. The market structure is most likely monopolistic competition d. both a and c e. none of the above

b. The industry is highly concentrated

_____ refers to an approach to assessing performance that targets managers' attention on four areas: financial, customer, internal business process, and learning and growth. a. best practices b. balanced scorecard c. SWOT analysis d. best practices

b. balanced scorecard

30. Sony's and Apple's ability to innovate to "reinvent" existing ways of doing things is known as ___. a. diversification b. creative destruction c. product augmentation d. imagineering

b. creative destruction

Autonomy, competitive aggressiveness, innovativeness, proactiveness, and risk taking are all dimensions of __________. a. competitive scope b. entrepreneurial orientation c. a mission statement d. Porter's five forces model

b. entrepreneurial orientation

Michael Porter is known as an Industry Organization (IO) economist because of his emphasis on industry analysis. However, his ______ framework also allows for a firm to gain competitive advantage through "uniqueness" for firms following a ______ strategy. a. five-forces; new entrant b. generic strategies; differentiation c. Total product; augmented product d. BCG matrix; diversification

b. generic strategies; differentiation

The "Market Map" we viewed in class (from finviz.com) depicted publicly traded firms in varying sizes of rectangles. The area of these rectangles depicts each company's ________. a. net income b. market capitalization c. revenue d. market share

b. market capitalization

What are the components of the "triple bottom line"? a. time, quality, cost b. people, planet, profit c. customers, employees, suppliers d. revenue, profit, dividends

b. people, planet, profit

Rumelt's criteria for strategy evaluation are: feasibility, consistency, consonance, and __________ a.Legality b.Advantage c.Sustainability d.Differentiation e.None of these

b.Advantage

What are Porter's dimensions of competitive scope discussed in class? (Hint: I added one that is not included in Porter's framework: business model scope). a.maverick, clone, parallel, off-radar b.Segment, Vertical, Industry, Geographic c.Intensive, Integration, Diversification, Defensive d.Profit, Leverage, Liquidity, Activity e.None of the above

b.Segment, Vertical, Industry, Geographic

Which of the following is the best example of a horizontal integration strategy? a.Microsoft's launch of its Xbox game console b.The merger of Glaxo with Smith-Kline Beechum c.Apple opening its retail store on King Street d.Starbuck's coffee purchasing coffee plantations

b.The merger of Glaxo with Smith-Kline Beechum

A "weak dollar policy" is often thought to be good for: a. U.S. importers of goods from foreign countries b. U.S. consumers c. U.S. exporters of goods to foreign countries d. U.S. citizens travelling abroad in foreign countries e. all of the above benefit from a "weak dollar policy"

c. U.S. exporters of goods to foreign countries

A take-out restaurant specializing in pizzas completes the order for a single pizza in 15 minutes. The employees of the restaurant are trained to deliver orders within the specified period. This is an example of a(n) _____ measure used to assess organizational performance. a. financial b. public responsibility c. internal business process d. customer

c. internal business process

Which of the following is NOT one of the main dimensions of competitive scope discussed in class? a. geographic scope b. segment scope c. market scope d. business model scope

c. market scope

A skill or activity in which a firm excels compared to rival firms is known as a (an): a.Generic Strategy b.VRIO proposition c.Distinctive competence d.Focused differentiation e.None of the above

c.Distinctive competence

BURISAS, a Finnish rock band, has created a niche for itself by combining heavy metal music with the imagery and costumes of Vikings. This is an example of: a.a blue ocean strategy b.first mover advantage c.bricolage d.a fighting brand e.diversification

c.bricolage

Big Bite Ltd., a multinational fast food chain, offers hamburgers, hot dogs, sandwiches, shakes, and deserts. The restaurant uses different ingredients in each country it operates, based on the central elements of that nation's diet. The managers at Big Bite Ltd. prefer to sacrifice efficiency in order to remain responsive to local requirements. Big Bite Ltd. uses which of the following strategies? a.global standardization b.transnational c.multidomestic d. disintermediation strategy a.balanced strategy

c.multidomestic