policy review
In their annual filing with the Securities and Exchange Commission, public companies in the United States must report which of the following?
benchmarks the total return to shareholders
The minimum efficient scale indicates the level of output needed to _______ the cost per unit as much as possible.
bring down
A firm uses the Blank______ business model when it sells a set of products that have different levels of demand for a price less than their total combined prices.
bundling
In the strategy process, questions concerning HOW to compete, such as through differentiation, are referred to as Blank______ strategy.
business
A ______ outlines the steps a manager will take to achieve competitive advantage in a single product market.
business-level strategy
In the relationship between per-unit cost and output, the minimum efficient scale ______.
is where the per-unit cost is lowest
In a focused cost-leadership strategy, a firm provides ______.
low-cost products to a niche market
After creating a vision as part of the strategic management process, what must a a firm establish next?
mission
Since about the year 2000, assets not captured in firms' accounting data have become ______ to a firm's competitive advantage.
much more important
High-end pen manufacturer Mont Blanc pursues a differentiation strategy pursuing only those who need or want an expensive writing instrument. What scope of competition does this represent?
narrow
In order to determine market capitalization, one multiplies which of the following together?
number of outstanding shares share price
Which of the following are offered by a balanced scorecard?
operational measures on customer satisfaction common financial metrics measures of internal processes
______ allows for bottom-up strategic initiatives to occur within a company and to be reviewed by executives.
planned emergence
What drives the learning curve effect?
increases in cumulative output within the existing technology
A firm's competitive advantage is determined jointly by _____________ and firm effects.
industry effects
Companies are required to provide Blank______ to shareholders, which are used in determining a firm's competitive advantage.
benchmarks
Which of the following describes how Amazon disrupted the traditional wholesale model for book publishers?
Amazon sold e-books for its e-reader device at a loss to promote sales of the e-reader.
What tactic did Amazon use when entering the book selling space and introducing the Kindle?
Amazon used disruption.
When one wants to further explore the difference in return on revenue (ROR) for two competitors, one can look at which of the following ratios? (Check the three that apply.)
COGS/revenue SG&A expense/revenue R&D expense/revenue
To determine how efficiently a company can produce a good, managers look to the ______.
COGS/revenue ratio
What is one of the benefits of pursuing a differentiation strategy when it comes to the power of suppliers?
Differentiation provides protection against an increase in input prices.
Strategic commitments tend to be which of the following?
Difficult to reverse Costly
At 3M, one strategic objective that has been implemented is that 30% of revenues must be obtained from new product introductions. This is an objective that would arise as an answer to which of the following balanced scored questions?
How do we create value?
Which statement best describes the cognitive bias of representativeness?
Individuals reach conclusions based on a small sample size or otherwise limited data, thereby violating the law of large numbers.
Which statement best describes the cognitive bias known as reason by analogy?
Individuals use simple examples to explain complex problems, even though the ideas in question may be very different from each other.
What is one potentially negative outcome that firms face when they deliver higher than expected growth?
Investors will expect a similarly high level of growth in the future.
Which of the following is true about a sustainable strategy for a business?
It is a strategy that can be pursued over time without harmful effects on people or the environment.
As JetBlue grew, which of the following occurred during the years following 2007?
It suffered a competitive disadvantage.
In the scenario-planning approach, what happens during the analysis stage of the AFI framework?
Managers work to identify potential future scenarios.
Which conditions are most likely to foster a positive relationship between vision statements and firm performance?
Organizational structures align with the vision statements. The vision statements are customer-oriented. Internal stakeholders are invested in defining the vision.
A standalone division of a larger conglomerate, with its own profit-and-loss responsibilities, is called a(n) Blank______.
SBU
To determine how well money devoted to sales support is being spent, managers look at the marketing intensity ratio, which is also known as ______.
SG&A/revenue
Which of the following are considered disadvantages of the shareholder value creation approach?
Stock prices can be highly volatile. Overall macroeconomic factors have a direct bearing on stock prices. Stock prices are influenced by the psychological mood of investors.
What is the premise of Henry Mintzberg's position regarding strategic planning?
Strategy can be planned or emerge from the bottom-up.
Critics of the more formalized strategic planning approaches proposed a framework that accounts for which of the following realities?
Strategy can be planned. Strategy can emerge from the bottom up.
Which of the following are pricing options offered by a blue ocean strategy?
The firm can charge a lower price than differentiators. The firm can charge a higher price than the cost leader.
Baby Buggy Baby sells high-end baby strollers. In an attempt to maintain its competitive advantage, the firm began adding additional features to its strollers. Customers liked these features and sales increased, but the company's profit margins shrank. Which of the following is the likely reason for this?
The firm neglected to control costs.
Which of the following best defines economies of scope?
They are the savings that come from producing two or more outputs at less cost than producing each output individually.
What must strategic leaders keep in mind if they are going to achieve successful strategic positioning?
To achieve strategic positioning, firms must make important trade-offs.
Which statements about vision statements and firm performance are true?
Vision statements and firm performance are sometimes associated with one another. A positive relationship between vision statements and firm performance is more likely to exist when the visions are customer-oriented.
Which of the following are the key questions for understanding the balanced scorecard?
What core competencies do we need? How do shareholders view us? How do we create value? How do customers view us?
Which of the following are questions that managers are likely to ask when beginning the strategic management process?
What do we ultimately hope to achieve? How can we achieve our goals? What are our values?
When competitive advantage is assessed from an analysis of publicly available data, a firm measures its Blank______.
accounting profitability
Opportunity costs refer to the value of what could have been gained had a person pursued Blank______.
an alternative use of available resources
If two firms produce very similar products at the same rate of output, and firm A is able to achieve lower per-unit costs than firm B by taking advantage of a new manufacturing technology, firm A is benefiting from Blank______.
an experience-curve effect based on process innovation
When a person decides to quit their job and start a company, the salary that person gave up when quitting can be considered Blank______.
an opportunity cost
Under a wholesale model, RETAILERS (not the wholesalers) sell goods for ______.
any price they want
In order to ensure that a firm is implementing the triple-bottom-line approach successfully, managers must Blank______.
audit the company's results in fulfilling its social and ecological obligations
Combining the razor-razor blade model and the subscription model means that telecom providers make their money through lengthy service plans, which in turn means that it is crucial that they keep their Blank______ rate, or the proportion of subscribers who leave, down.
churn
Public companies are required by law to release detailed accounting data, which enables Blank______.
comparative analysis of firms
Value drivers known as ______ add value to a product or service when they are consumed in tandem with the focal product.
complements
If Tom would have paid $1,000 for a new laptop but was able to purchase one for $800, the $200 he saved is considered his Blank______.
consumer surplus
An important requirement for increasing economic value creation under a differentiation strategy is to ______.
control costs
A firm that hopes to achieve a competitive advantage by maintaining an efficient supply chain and taking advantage of economies of scale and a well-trained staff is focusing on ______.
cost drivers
A firm that pursues a differentiation strategy will often find that the added expense of offering new or unique product features offsets the increase in perceived value, and profit margins begin to erode. This underscores the importance of Blank control for firms pursuing a differentiation strategy.
costs
According to the ______ rule, increasing the surface area (size) of a storage unit or retail facility results in a disproportionate increase in volume (space).
cube square
A firm that offers a liberal return policy and free shipping on goods ordered online hopes to increase its perceived value by focusing on ______.
customer service
A struggling retailer seeking to implement a blue ocean strategy is likely to experience difficulty with ______.
cutting costs and increasing value at the same time
Compared to the past, the importance of firms' intangibles has increased. Therefore the importance of a firm's book value has Blank______ as part of the firm's total stock market valuation.
decreased
Economic value created is the Blank______ the cost to produce a product/service and the amount the buyer is willing to pay for it.
difference between
Furniture retailer IKEA has used the value innovation framework of ______ to successfully implement a blue ocean strategy.
eliminate-reduce-raise-create
When pursuing a differentiation strategy, a firm can achieve a competitive advantage by ______.
ensuring that its economic value exceeds that of its competitors
A core values statement provides information to employees regarding the company's Blank______.
ethics and morals
What are the four most important cost drivers that managers can manipulate?
experience curve effects learning curve effects cost of input factors economies of scale
In order for a firm to successfully implement a business-level strategy, it must limit the impact of which of the following?
external threats its own internal weaknesses
According to Daniel Kahneman and Amos Tversky, System 1 is analytical, logical, and deliberate.
false
True or false: Stock market valuations are often unreliable due to market fluctuations and are therefore not used to assess competitive advantage.
false
True or false: The best measure of competitive advantage can be found in the performance of specific departments.
false
True or false: Top-down strategic planning is most effective when the environment is constantly changing.
false
True or false: When a user values two products equally, they are negatively correlated.
false
True or false: When companies commit to sustainable strategies, they do so purely out of a spirit of charity.
false
The money a firm spends to set up a sales website can be considered a Blank______ cost.
fixed
The goal of using the AFI strategy framework for scenario planning is to create strategic plans that are Blank______.
flexible
Everybody can use the basic version of Dropbox for free, but needs to pay for premium services. Dropbox operates on a Blank______business model.
freemium
Premium services that cost money, with complementary basic services, is a description of which type of business model?
freemium
Answering the balanced scorecard question of "how do we create value?" challenges managers to develop strategic objectives that ensure which of the following?
future organizational learning future innovation future competitiveness
For a product that has a large economic value, a firm can choose to charge the same price as competitors in order to Blank______.
gain market share
Business strategy is developed by Blank______.
general managers in strategic business units
A company's stock price increases if the company Blank______.
grows faster than expected
Jennie is the CEO of an information technology company. Based on the data that her researchers have compiled, she feels confident that her strategic plan for the company will be successful in the future, regardless of what happens. Based on this information, it seems that Jennie Blank______.
has an illusion of control
Marriott offers different hotels that cater to different types of travelers (e.g., Residence Inn, Marriott Courtyard, Marriott Fairfield Inn). What is this an example of?
how a firm can compete by offering more perceived value at a similar price
Which of the following are elements of the social dimension of the triple bottom line?
human sustainability achieving work/life balance
Rodney is making decisions about his newly formed business. He wants to focus on producing the highest-quality product in the market so he can maximize the product's value to customers. This will cause his product to have higher costs than others already in the market, but Rodney believes customers will pay more for the higher-quality product. Rodney's choice to use a differentiation business-level strategy is determining his company's strategic ______.
position
Which of the following is an important part of strategic leadership and is the strategic leader's ability to influence and direct individuals to do things?
power
As a consequence of the rapid development of business models, ______ may breach existing rules of commerce.
producers
Two important features that managers can adjust in an effort to improve the firm's strategic position are ______.
product features and customer service
What type of vision statement tends to limit a manager's flexibility and ability to adapt?
product-oriented
another name for producer surplus is
profit
The business model used by telecommunication companies when they provide a basic cell phone at no charge when the customer signs a two-year contract is a combination of which of the following types of business models?
razor-razor blade subscription
What cognitive bias is in play when individuals draw conclusions based on very small samples or a single anecdote, thus violating the law of large numbers?
representativeness
he ______ determines whether to pursue a specific narrow part of the market or to go after the broader market.
scope of competition
The owner of small hotel resort would like to advertise in major American newspapers and magazines as a part of a larger strategy, but lacks the money to do so. One day, the hotelier meets the owner of a group of newspapers and magazines, who offers advertising space in exchange for a stay at the hotel. This is an example of which of the following?
serendipity
Which of the following are among the standard dimensions for measuring competitive advantage?
shareholder value economic value accounting profitability
When a trade occurs, the consumer and producer both capture Blank______.
some of the economic value
According to ______ theory, a firm exists within an interconnected network of constituencies, both within and outside the organization, and the firm is responsible to these constituencies.
stakeholder
A strategic business unit (SBU) is defined as a(n) Blank______.
standalone division of a larger conglomerate
A firm's strategic profile based on value creation and cost is called its ______.
strategic position
Choosing a business-level strategy helps to define a firm's ______ in a given product market.
strategic position
A(n) ______ requires making a choice between a cost position and a value position.
strategic trade-off
One way that a company can try to avoid problems resulting from diseconomies of scale is to ______.
structure the company into smaller units
Managers implement the blueprint of their business model through which of the following?
structures processes culture
A powerful strategic commitment assures Blank______.
that steps are taken to achieve the mission
Which of the following is the conceptual framework developed by Jim Collins that describes the progression of leadership through distinct, sequential levels?
the Level-5 leadership pyramid
When managers analyze a wide variety of internal and external performance metrics in order to set financial and strategic goals, they often turn to a framework known as Blank______.
the balanced scorecard
What are the two factors upon which the success of strategy of either cost leadership or differentiation is built?
the firm's internal strengths external opportunities in the market
The major assumption in the top-down strategic planning process is that Blank______.
the future can be predicted based on the past
Strategy Implementation primarily involves which of the following?
the organization, coordination, and integration of how work gets done
Economic value creation is calculated as Blank______.
the sum of consumer and producer surplus
The Blank______ is simply a graphic representation of a firm's relative performance across different competitive factors in an industry.
the value curve
The horizontal connection of the points of each value on the strategy canvas is known as ______.
the value curve
Which theory proposes that when faced with decisions, we tend to satisfice rather than optimize?
theory of bounded rationality
In terms of productivity, which of the following is true of learning curves?
they go down
Because external factors create volatility in stock prices, a better measure of a firm's performance over the long term is the Blank______.
total return to shareholders
Wholesaling is considered a(n) ______ business model.
traditional
The balanced scorecard framework enables managers to do which of the following?
translate the strategic vision into operational goals implement feedback and organizational learning communicate and link the strategic vision
For a balanced scorecard to be effective, managers must do which of the following?
translate their strategy into measurable objectives formulate an effective strategy for achieving competitive advantage manage objectives according to the balanced-scorecard approach
Which of the following frameworks work to provide a more holistic perspective on firm performance?
triple bottom line balanced scorecard
True or false: A company that achieves differentiation parity at a lower cost has implemented a successful cost-leadership strategy.
true
True or false: Tesla's high stock market valuation is partly justified by the company's learning curve
true
True or false: The resource-allocation process (RAP) can be designed to support planned emergence.
true
In general, a firm generates ______ when its cost of capital is lower than its ROIC.
value
Which of the following are significant threats to a firm pursuing a cost-leadership strategy?
value falling below the acceptable threshold replacement by innovative substitutes competitors adopting similar business strategies
Implementing a blue ocean strategy requires making competition irrelevant and creating a new market space, otherwise known as ______.
value innovation
Which of the following determine a firm's competitive advantage?
value position relative to competitors cost position relative to competitors
Which of the following makes it more likely that producers will breach existing rules of commerce when responding to rapid developments in business models?
when the business models are disruptive
Which of the following are questions that managers must answer when pursuing value innovation?
which product factors to eliminate which product factors to raise above the industry standard which new product factors to create which product factors to reduce below the industry standard
