Strategic Management Exam 2 sample questions

which of the following modes of entering foreign markets allow the lowest level of control

exporting

which of the following drivers simultaneously increases value while lowering cost?

innovation

rival firms make an alliance but don't take equal profit shares

co-operataion

Luxury cars that follows differentiation strategy can compare their position with

company that sells high end cars

which of the following describes an airline that is most likely stuck in the middle?

"Just right" airline high quality food and drinks, plush airport lounges, only a few connections via hubs domestically, poor customer service, and low prices

what illustrates a non-equity alliance?

a contractual agreement that provides motor source inc. non exclusive rights to supply component parts to pristine autos inc

which of the following best illustrates physical asset specifity

a machine solely designed to give candy its trademarked shape

Under CAGE frameworks political distance between two countries increases with

absence of a trading block

when internet service providers offer free routers for subscriptions to their wireless internet packs, the perceived value of the service offering increases. In this case, the value driver would be

availability of complements

increasing value and lowering cost

blue ocean (ex- circus de soleil, ikea)

two companies in the same market trying to get competitive advantage

create greater perceived value

firms pursuing a differentiation strategy primarily seek to

create higher customer perceived value that the value that competitors create

home smart inc. is a chain of a supermarket that charges a higher cost yet it has more customers. what strategy has it adopted?

differentiation

XYZ operated at an output level that allows it to keep its cost per output the lowest in the industry. It's a price leader. Competing companies cannot do this at the same efficiency and it puts them at a disadvantage. The cost driver behind XYZ's strategic position is

economies of scale

a firm pursing a differentiation strategy as opposed to a low cost strategy will

focus its research and development on product technologies to add uniqueness

when approaching a bank for a loan, the borrower has a better knowledge than the lender about his/her ability to repay without defaulting. This situation is referred to as

information asymmetry (deciding who to form alliances and make v. buy decisions)

superior product that allows multiple users to operate at the same time. This technology was leased to rev for five years. Which of the following alternatives to integration does this best illustrate?

licensing

a company has RD in Germany and its better informed about its industry because it uses German knowledge. Its reaping benefits of

location economies

US company makes it's products in Japan and Taiwan where its products is developed and manufactured before being released worldwide. What alternative to integration does this illustrate?

parent-subsidiary relationship

managers in a firm hired to improve the profitability and shareholders value will add to the overall costs if the pursue their own self interests. This illustrates

principal agent problem

a company that acquired another one now sells products sold by the one it bought. As a result the sales force will also be marketing and acquired companies products. How will horizontal integration affect it?

pure source will lower its cost through economies of scale

horizontal integration

regal autos inc going with marcus motors inc., one of its direct competitors

When a firm makes choices between a cost or value position to achieve competitive advantage it is involved primarily in

strategic trade offs

apple and nike have their own retail outlets and use independent retailers. Both the brick and mortar type and online to sell their products. this is

taper integration

Which of the following is a firm effect that has an impact on the competitive advantage of a firm

the value and the cost position of the firm relative to the competitors

what is a disadvantage of equity alliances

they can entail significant investments