Strategic Management Final Exam

One of the risks of pursuing a blue ocean strategy is that a firm can find itself a. ineffective when competing on an international scale. b. "stuck in the middle." c. losing sight of its mission and vision. d. competing with only a differentiation strategy.

"stuck in the middle."

Which of the following statements is true of accounting data? a. Accounting data consider off-balance sheet items, such as pension obligations of a firm. b. Accounting data are historical data and thus backward-looking. c. Accounting data do not have to be adjusted in any manner to compare companies with different capital structures. d. Accounting data focus mainly on intangible assets, rather than tangible assets.

Accounting data are historical data and thus backward-looking.

________ is best described as the difference between a buyer's willingness to pay for a product or service and a firm's total cost to produce it. a. Cost of capital b. Economic value created c. Consumer surplus d. Break-even point

Economic value created

________ is best described as decreases in cost per unit as output increases. a. Economies of scale b. Time compression economies c. Economies of scope d. Diseconomies of scale

Economies of scale

Which of the following statements accurately brings out the difference between tangible and intangible resources? a. Tangible resources contribute to a company's competitive advantage, whereas intangible resources have little effect on competitive advantage. b. Tangible assets are difficult for competitors to imitate, whereas intangible assets can be easily replicated. c. Tangible assets can be bought on the open market by anyone with the necessary cash, whereas intangible assets cannot be easily purchased. d. Tangible resources take a longer time to build, whereas intangible assets can be built comparatively easily.

Tangible assets can be bought on the open market by anyone with the necessary cash, whereas intangible assets cannot be easily purchased.

In an industry, the threat of entry is high when a. switching costs are high. b. technological know-how is industry-specific. c. expected returns are low. d. capital requirements are low.

capital requirements are low

To help a firm achieve a competitive advantage, each distinct activity performed in the value chain needs to a. reduce the immobility and the heterogeneity of the firm's resources. b. create a static fit between the company's internal resources and the external environment. c. contribute to the firm's strategic position as either low-cost leader or differentiator. d. reduce the causal ambiguity and the social complexity of the firm's source of success.

contribute to the firm's strategic position as either low-cost leader or differentiator.

Frozen Gold is a fast-growing chain of ice cream shops. It has acquired an edge over its competitors through its ability to provide a wide array of unique flavors and a hip atmosphere in stores. This advantage of Frozen Gold best exemplifies a a. markup. b. capital gain. c. resource flow. d. core competency.

core competency.

Pete E' Gee sell's Big Dog Choppers, a special type of motorcycle. His business generates roughly 80 percent of his revenues from selling these motorcycles and about 20 percent on motorcycle repair and service. Pete E' Gee would be classified as a ________ firm. a. related diversification b. unrelated diversification c. dominate business d. single business

dominate business

The group of customers referred to as the ________ lead the wave of increased demand as the industry moves from the introduction stage to the growth stage. a. early adopters b. early majority c. late majority d. laggards

early majority

Tesla is addressing environmental concerns regarding the carbon emissions of gasoline-powered cars by building zero-emission battery-powered vehicles. This best represents which of the following PESTEL categories? a. political b. technological c. economic d. ecological

ecological

Strategic commitments are actions that are a. long-term-oriented b. inexpensive c. easy to imitate d. easy to reverse

long-term-oriented

Pharmacat Pharmaceuticals invested $3.4 billion dollars to develop a new drug for individuals with diabetes. After Pharmacat receives FDA approval of the drug, its marginal cost to produce the drug for market will be a. high b. unpredictable c. moderate d. low

low

According to the value chain analysis, which of the following is a primary activity? a. accounting and finance b. marketing and sales c. human resources management d. research and development

marketing and sales

Managers in a firm hired to improve the firm's profitability and ultimately the shareholders' value will add to the overall costs if they pursue their own self-interests. What does this best illustrate? a. diseconomies of scale b. information asymmetries c. principal-agent problem d. experience-curve effects

principal-agent problem

Connell Inc. has been successful at differentiating itself from competitors by claiming a premium price for its digital cameras based on superior image quality and advanced technology. In this scenario, which of the following is the key value driver? a. customer service b. product features c. economies of scale d. low-cost input factors

product features

Because Meta/Facebook receives almost all of its revenues from online advertising, we would conclude that Meta/Facebook would be characterized as a(n) ________ firm, which has the lowest levels of corporate diversification. a. related diversification b. non-dominate business c. single business d. unrelated diversification

single business

Mark owns Drones 'R' Us, Inc. and is looking for an alternative to vertical integration. He decides to manufacture some of his own parts while keeping a few key suppliers in his industry value chain as well. This is known as a. a balanced score card. b. taper integration. c. forward vertical integration. d. strategic off shoring.

taper integration.

Which of the following approaches to assess competitive advantage is based on the view that noneconomic factors can have a significant impact on a firm's financial performance? a. the balanced-scorecard b. the economic value creation framework c. the triple-bottom-line approach d. the accounting profitability approach

the triple-bottom-line approach

A defining characteristic of the subscription-based business model is that the a. user pays for only the services he or she consumes. b. basic features of a product or service are provided free of charge, but the user must pay for premium services such as advanced features or add-ons. c. user pays for access to a product or service whether he or she uses it during the payment term or not. d. initial product is often sold at a loss or given away for free in order to drive demand for complementary goods.

user pays for access to a product or service whether he or she uses it during the payment term or not.

A defining characteristic of the pay-as-you-go business model is that the a. users pay for access to a product or service whether they use it during the payment term or not. b. the basic features of a service are provided free of charge, but the user must pay for premium services. c. initial product is often sold at a loss in order to drive demand for complementary goods. d. users pay for only the services they consume.

users pay for only the services they consume.

WeComput Inc.'s competency in designing and manufacturing efficient microprocessors has made its laptops the most advanced computers in the market. This competency, along with the just-in-time manufacturing system, has enabled WeComput Inc. to increase its profitability by lowering its production costs. Thus, WeComput's competency in designing and manufacturing microprocessors will be considered a(n) _____ resource in the VRIO framework. a. substitute b. organized c. inimitable d. valuable

valuable

The goal of a strategic position is to create the largest gap possible between the ________ that a firm creates through its offerings and the ________ required to create these offerings. a. gap; ROIC b. value; cost c. market share; defensive strategy d. marketing; innovation process

value; cost

Swedish furniture giant IKEA reported sales of $44 billion in 2019. The company turned a profit by recycling waste into some of its best-selling products. Before, this waste had cost the company more than $1 million per year. And the company is well on its way to "zero waste to landfill" worldwide. According to Joanna Yarrow, IKEA's head of sustainability for the United Kingdom, "We don't do this because we're tree huggers, we do this because it's very cost-effective." This passage best represents which of the following frameworks below? a. the economic value framework b. the triple-bottom-line framework c. the PESTEL framework d. the balanced scorecard framework

the triple-bottom-line framework

The primary objective of Porter's five forces model is to a. break down a firm's value chain activities into primary and support. b. understand valuable, rare, and hard-to-imitate resources. c. understand the profit potential of industries. d. reduce the gap between the value of a firm's product and its cost of production.

understand the profit potential of industries.

Which of the following summarizes the difference between a firm's vision and mission? a. A vision states how much a firm wants to earn; a mission states how these earnings will be accomplished. b. A vision states the ethical values of a firm; a mission states the monetary goals of a firm. c. A vision states the management values of a firm; a mission states the values of the other workers. d. A vision states what a firm wants to accomplish; a mission states how a firm plans to accomplish this vision.

A vision states what a firm wants to accomplish; a mission states how a firm plans to accomplish this vision.

Janet wants to restructure the portfolio of all her firm's strategic business units. Janet will more than likely employ the ________ tool. a. diversification premium b.Boston Consulting Group (BCG) matrix c.value chain analysis d.VRIO

Boston Consulting Group (BCG) matrix

Which of the following expressions accurately describes market cap? a. It is the difference between a firm's account receivables and account payables. b. It is the difference between the book value and the market value of a firm's assets. c. It is the product of the number of outstanding shares and the share price. d. It is the ratio of a firm's equity finance and its debt finance.

It is the product of the number of outstanding shares and the share price.

Which of the following is a primary feature of the five forces model? a. It takes into account a firm's internal resources, capabilities, and core competencies. b. It views competition within an industry broadly to include forces such as buyers, suppliers, and the threat of substitutes. c. It is concerned exclusively about the intensity of rivalry among direct competitors. d. It helps managers determine the changing speed of an industry or the rate of innovation.

It views competition within an industry broadly to include forces such as buyers, suppliers, and the threat of substitutes.

Jill is interested in the concept of strategy and decides to create her own. As a result, Jill says that her strategy is to focus on growth and marketing to achieve competitive advantage. How would you evaluate Jill's statement? a. Jill should reevaluate her statement because it fails to meet the principles of what a strategy should be. b. Jill's strategy reveals a clear strategic position and tradeoff, so she should proceed. c. Jill should reevaluate her statement because it fails to mention human resources and finance. d. Jill's strategy makes sense and she should move forward with it.

Jill should reevaluate her statement because it fails to meet the principles of what a strategy should be.

How is a firm's task environment different from its general/macro environment? a. Managers have no direct effect over external factors in the task environment; they have some influence over external forces in the general environment. b. Managers have influence over all external factors in the task environment; they have no direct effect over external forces in the general environment. c. Managers have no direct effect over external factors in the task environment; they have influence over all external forces in the general environment. d. Managers have some influence over external factors in the task environment; they have little direct effect over external forces in the general environment.

Managers have some influence over external factors in the task environment; they have little direct effect over external forces in the general environment.

________ is the benefit that is missed or given up when an investor, individual or business chooses one alternative over another. a. Reservation price b. Accounting profitability c. Opportunity cost d. Value creation

Opportunity cost

The ________ allows the scanning, monitoring, and evaluating of changes and trends in a firm's macro environment. a. BCG matrix b. SWOT analysis c. VRIO framework d. PESTEL framework

PESTEL framework

Which of the following statements accurately describes a firm's resource stock? a. Resource stocks are a firm's level of resources that are common to competitors. b. Resource stocks are a firm's level of investments to maintain or build a resource. c. Resource stocks are a firm's current level of intangible resources. d. Resource stocks are a firm's future estimate of both tangible and intangible resources.

Resource stocks are a firm's current level of intangible resources.

________ precisely indicates how much of a firm's sales is converted into profits. a. Inventory turnover b. Working capital turnover c. Break-even price d. Return on revenue

Return on revenue

Jennifer, a manager at a multinational organization, is trying to carefully scan and link the firm's internal environment to its external environment. The insights from this analysis will allow her to effectively leverage the company's internal strengths to exploit external opportunities, while mitigating internal weaknesses and external threats. In this scenario, which of the following managerial tools is Jennifer employing?B a. BCG matrix b. Blake Mouton managerial grid c. Ansoff's matrix d. SWOT analysis

SWOT analysis

Which of the following statements is true of joint ventures? a. They cannot entail long negotiations. b. They enable the exchange of both tacit and explicit knowledge. c. They are characterized by single reporting lines. d. They reduce the possibilities of trust and commitment.

They enable the exchange of both tacit and explicit knowledge.

________, which is the return on risk capital, includes stock price appreciation plus dividends received over a specific period. a. Receivables turnover b. Earnings per share c. Total return to shareholders d. Dividend yield

Total return to shareholders

________ is best described as a measure of how effectively capital is being used by a firm to generate revenue. a. Working capital turnover b. Risk capital c. Return on revenue d. Revenue per employee

Working capital turnover

The tenet behind the triple-bottom-line is that a. a firm's primary objective should be increasing the total returns to its shareholders. b. a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy. c. a firm's return on revenue can be broken down into three ratios: COGS/Revenue, R&D/Revenue, and SG&A/Revenue. d. a firm should solely focus on increasing the economic value created to/for its customers.

a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy.

Grace wants to form a voluntary arrangement with another firm in order to gain more flexibility in her supply chain, complementarity to a few of her support activities via her value chain, and strengthen her firm's overall competitive position. Grace is looking for a simple and common type of alliances, like a. a joint venture b. a nonequity alliance c. a merger d. an equity alliance

a nonequity alliance

Which of the following is an element of good strategy? a. a summary of the firm's history within its industry b. an approach that underestimates the competition c. a set of coherent actions to implement the firm's guiding policy d. a guiding policy to address employee satisfaction

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

Bob is exploring multiple suppliers in order to find the best price. However, instead of calling all eight potential suppliers, he only reaches out to the first three and bases his selection on those instead of contacting all suppliers. Bob's action best describes the concept of a. satisficing b. escalating commitment c. optimal decision making d. the illusion of control

a. satisficing

The strategic objective of a first mover during the introduction stage of the industry life cycle is to a. pursue a harvest strategy. b. lower entry barriers. c. survive by drawing on deep pockets. d. achieve market acceptance.

achieve market acceptance.

When large, incumbent firms buy start-up companies, the transaction is generally described as a(n) a. acquisition b. alliance c. partnership d. joint venture

acquisition

There are several mechanisms in which strategic alliance can be governed. Which of the following below is not one of those ways? a. acquisitions b. equity alliances c. nonequity alliances that contain contractual agreements d. joint ventures

acquisitions

The Konex Hotel Group purchased Green-Plus Hotels for an estimated value of $120 billion. All the hotels previously owned by Green-Plus Hotels are now managed by the Konex Hotel Group and are known as Konex hotels. What does this scenario best illustrate? a. a merger b. a joint-venture c. an acquisition d. an equity alliance

an acquisition

Which of the following tasks in the AFI strategy framework involves evaluating the internal and external environments in which a firm operates? a. analysis b. formulation c. competitive advantage d. implementation

analysis

When firms innovate by leveraging existing technologies into new markets, they are said to be involved in a. architectural innovations. b. disruptive innovations. c. radical innovations. d. incremental innovations.

architectural innovations.

Billy is the CEO of Billy's Kicks, a soccer ball retailer. He decides to purchase the synthetic rubber manufacturing firm so he can create his own soccer balls and sell them, nationally, in his retail stores. In order to do this, Billy will need to engage in ________, which is a corporate level strategy. a. differentiation. b. forward vertical integration. c. backward vertical integration. d. horizontal integration.

backward vertical integration.

Which of the following is NOT considered an important macro-environmental influence on businesses (that is, a potential influence beyond that of the industry alone)? a. economic factors b. bargaining power of suppliers c. political changes d. technological factors

bargaining power of suppliers

When a firm is able to successfully employ a blue ocean strategy, it will create a competitive advantage by a. combining high quality and product features to provide service that customers truly value. b. using a first-mover advantage to be the lowest price in the market. c. beating rivals on product attributes while offering a better price. d. winning market share with a highly differentiated product.

beating rivals on product attributes while offering a better price.

In a successful ________ strategy, the trade-offs between differentiation and low cost are reconciled. a. focused differentiation b. blue ocean c. divestment d. liquidation

blue ocean

Several notable firms like Eli Lilly, HP, Procter & Gamble, and IBM each wish to become the alliance "partner of choice" for small technology ventures, colleges, and inventors. They each know that ________ is a necessary and critical element for an alliance to be a success. a. a hostile takeover b. partner implementation c. sharing explicit knowledge d. building interorganizational trust

building interorganizational trust

A ________ primarily details the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market. a. business-level strategy b. mission statement c. functional level strategy d. code of ethics

business-level strategy

Bob is the strategic business unit (SBU) CEO in charge of manufacturing cufflinks for men's clothing. While the market he competes in is low growth, Bob's SBU's earnings and cash flow are both ranked at high and stable. When examining Bob's SBU through the Boston Consulting Group (BCG) matrix lens, we can conclude that his SBU would be classified as a a. cash cow. b. question mark. c. dog. d. star.

cash cow.

InGen Pharmaceuticals Inc., Desktop Pharma Inc., and WEN Pharma Inc. are three rival firms who have set up an alliance to conduct research and find a cure for cancer. They have made almost equal contributions to the research, and they also share their expertise with one another. However, the three firms will continue to behave as competitors in markets for other drugs and vaccines. What is this arrangement best referred to as? a. takeover b. acquisition c. buyout d. co-opetition

co-opetition

Susan is trying to determine if her company has a competitive advantage. She must be able to accomplish two critical tasks before she can substantiate this claim. First, she must assess the performance of her company accurately; second, she must a. focus on creating value by utilizing operational effectiveness such as Six Sigma and lean manufacturing. b. assess her capital and liquid position to ensure funding for future projects. c. ensure the right strategic leaders are in place that can execute her strategy. d. compare and benchmark her firm's performance to other competitors in her same industry.

compare and benchmark her firm's performance to other competitors in her same industry

The value a consumer attaches to a product or service is captured in the a. consumer's maximum willingness to pay for it. b. difference between the price charged for it and the cost to produce it. c. least price a consumer is willing to pay for it. d. expenses incurred by the firm in manufacturing it.

consumer's maximum willingness to pay for it.

Most consumers and investors today want the firms they do business with to look beyond just the profit motive. In fact, they want firms that behave legally and ethically while also giving back to their communities via philanthropic activities. The framework that attempts to reconcile these wants is known as a. business model analysis b. value chain driven decision making c. stakeholder impact analysis d. corporate social responsibility

corporate social responsibility

Bill Burke is the CEO of Project Inc. a supply chain firm. Bill's company considers installing a new piece of machinery in one of his factories. Installing this new machinery will cost money; paying the technicians to install the machinery, transporting the machinery, buying the parts and so on. Bill plans on financing his operations by issuing stock (equity) and issuing bonds (debt). He needs his return on invested capital (ROIC) to exceed his ________ in order to determine if he should take on the project. a.cost of capital b.payback period c.cost of stock d.return on revenue

cost of capital

Strategic commitments are actions that are a. inexpensive, short-term-oriented, and easy to reverse. b. costly, long-term-oriented, and difficult to reverse. c. inexpensive, long-term-oriented, and difficult to reverse. d. costly, short-term-oriented, and easy to reverse.

costly, long-term-oriented, and difficult to reverse

The goal of a good strategy is focused primarily on a. making as much money as possible. b. encouraging investors to buy more shares of the firm. c. employing lean manufacturing and Six Sigma. d. creating superior value while containing costs.

creating superior value while containing costs

The first step to gain and sustain a competitive advantage is to a. develop functional and business-level strategies. b. define a firm's vision, mission, and values. c. understand the strategies of the competitors. d. put the guiding policies of a firm into practice.

define a firm's vision, mission, and values

In a firm's external environment, ________trends primarily capture population characteristics related to age, gender, family size, ethnicity, sexual orientation, religion, and socioeconomic class. a. economic b. demographic (sociocultural) c. political d. ecological

demographic (sociocultural)

Viral Apparel is the market leader in the sportswear industry. Though most of its resources are common to those of its competitors, a few rare resources have helped the company gain and sustain a competitive advantage. Which of the following assets of Viral Apparel is most likely to be considered a rare resource that is contributing to its competitive advantage? a. design patents b. raw materials supplies c. land and buildings d. plant and machinery

design patents

Gr8t Food is a chain of "fast casual" restaurants that sells its menu items at higher prices than its competitors. 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 Gr8t Food adopted in this scenario? a. differentiation b. market penetration c. product diversification d. cost-leadership

differentiation

When Total Semiconductors was operating at the minimum efficient scale of 10,000-12,000 units per month, the firm's cost per unit was $45. However, when the output level was increased beyond 12,000 units, the cost per unit increased to $47. This increase was attributed to the wear-and-tear of the machinery, and complexities of managing and coordinating. What is this phenomenon known as? a. diseconomies of scale b. experience-curve effect c. learning-curve effect d. minimum efficient scale

diseconomies of scale

What is the main reason that most mergers and acquisitions negatively affect shareholder value? a. Promised synergies never take place. b. Companies that resist acquisitions are subject to the "winner's curse." c. Market conditions change too quickly. d. The entire market becomes an oligopoly or a monopoly.

disruptive

Marriott is able to create greater economic value than its competitors due to their ability to take advantage of ________, which describe the savings that come from producing two (or more) outputs at less cost than producing one output individually, while utilizing the same amount of resources and technology. a. economies of scope b. cost of input factors c. diseconomies of scale d. economies of scale

economies of scope

In the aircraft manufacturing industry, at least for large commercial jets, Boeing and Airbus are the only competitors. There is not a significant threat of entry because a. there is expected to be a huge return on investment within this industry b. entering the aircraft manufacturing industry requires huge capital investments. c. there is no credible threat of retaliation from the incumbents. d. entering the aircraft manufacturing industry means violating government policies.

entering the aircraft manufacturing industry requires huge capital investments.

Organizational core values are the ________ that govern the behavior of individuals within a firm or organization. a. ethical standards and norms b. political principles and policies c. economic measures d. social beliefs and actions

ethical standards and norms

A successful strategy details a set of goal-directed actions that managers make to gain and sustain a competitive advantage; in order to create this strategy, managers must focus on three pillars. Which of the following below is not one of these pillars? a. execution b. analysis c. implementation d. formulation

execution

Jill is the CEO of Note's Etc, a stationary manufacturer. She decides to open up a retail store to sell her products directly to consumers instead of just selling to retailers. In order to do this, Jill will need to engage in ________, which is a corporate level, strategy. a. backward vertical integration. b. forward vertical integration. c. differentiation.

forward vertical integration.

Jennifer is the strategic business unit (SBU) CEO in charge of manufacturing stereo speakers for computers and laptops. Her SBU earnings and cash flow are both low and unstable. Which of the following strategies should Jennifer enact if examining her SBU through the Boston Consulting Group (BCG) matrix lens? a. allocate more resources for manufacturing b. invest for growth c. hold d. harvest and/or divest

harvest and/or divest

LightningDrive is a leading automobile company. The company has been able to sustain its competitive advantage primarily due to its high-quality and efficient electric motors. Most of its competitors have failed to develop similar electric motors at a reasonable price. Which of the following resource attributes listed in the VRIO framework has helped LightningDrive sustain its competitive advantage? a. high costs involved in imitation b. inexhaustible nature c. resource mobility d. intangibility of the company's resource

high costs involved in imitation

Through ________, a firm puts its guiding policy into practice by employing a set of coherent actions. a. formulation b. implementation c. analysis d. control

implementation

Given the accelerated pace of technological change, in combination with deregulation, globalization, and demographic shifts, a firm will be successful today only if its a. competitive advantage is derived from static resource or market advantages. b. resource advantage is not causally ambiguous or socially complex. c. resource advantage is maintained for a short period of time. d. internal strengths change with its external environment in a dynamic fashion.

internal strengths change with its external environment in a dynamic fashion

Which of the following lists the stages of the industry life cycle in the correct order? a. introduction, growth, shakeout, maturity, and decline b. introduction, growth, maturity, shakeout, and decline c. introduction, shakeout, growth, maturity, and decline d. introduction, shakeout, maturity, growth, and decline

introduction, growth, shakeout, maturity, and decline

Core competencies are derived from the combination of a. export barriers, trade barriers, and credit barriers faced recently by the company. b. tax policy changes driven by federal programs and R&D grants at the state level. c. knowledge brought in by new graduates and the mentoring they receive from existing employees. d. key strategic resources and a firm's capabilities.

key strategic resources and a firm's capabilities.

Economies of scale are cost advantages that accrue for firms with a. high capital risks b. low employee turnover c. high fixed costs d. larger output

larger output

Which of the following is an accurate statement about learning effects? a. learning effects can produce diseconomies. b. learning effects occur over time as output accumulates. c. learning effects are captured at one point in time d. learning effects are significant in all production processes.

learning effects occur over time as output accumulates.

Decisions relating to the range of products and services a firm will offer determine the firm's a. absorptive capacity b. vertical integration c. geographic scope d. level of diversification

level of diversification

A disruptive innovation leverages ________ technologies, while architectural innovations are based on ________ technologies. a. new; existing b. existing; novel c. required; established d. drastic; new

new; existing

Crocs Shoes was unable to sustain its competitive advantage over their rivals because its key strategic resource was a. not comfortable or waterproof. b. valuable in the eyes of the consumer. c. too inexpensive. d. not costly to imitate by competitors.

not costly to imitate by competitors.

When company managers formulate strategy decisions resulting from their internal analysis, they are primarily making decisions about how to a. grow their company at any cost. b. obtain and allocate critical and scarce resources. c. reduce costs in their industry. d. minimize foreign corporate income taxes.

obtain and allocate critical and scarce resources.

The primary goal of a firm pursuing a blue ocean strategy should be to a. offer a differentiated product or service at a low cost. b. create the highest perceived value in its respective industry. c. achieve a less steep learning curve. d. build a reputation of being the lowest-cost producer in its chosen industry.

offer a differentiated product or service at a low cost.

Facebook has become one of the largest media companies in the world, valued at nearly 50 billion in 2019, but hasn't produced a single piece of content. Facebook is an example of a a. platform business b. a typical value chain driven business c. strategic business unit d. pipeline business

platform business

Value chain analysis consists of systematically analyzing a firm's key activities that for analysis purposes are categorized into two groups: a. primary activities and support activities. b. customers and suppliers. c. products and service activities. d. profits and losses.

primary activities and support activities.

Delos Autos Inc., a large automobile company, made an initial small investment in a start-up company that was developing a solar-powered car. This gave Delos Autos controlling interests in the start-up company. However, Delos Autos had no obligations to make continued investments in the experiments of the start-up company. It could invest small amounts depending on the new product's success at each stage of its development. If the product proved to be successful, Delos Autos would have the right to buy out the start-up company. This approach to strategic alliance is referred to as a. a real-options perspective. b. transaction cost economics. c. credible commitment. d. a break-even analysis.

real-options perspective.

In terms of the build-borrow-or-buy framework, a firm's internal resources are considered to be relevant when they are a. similar to those that need to be developed and superior to those of competitors in the targeted area. b. different from those that need to be developed and inferior to those of competitors in the targeted area. c. similar to those that need to be developed and inferior to those of competitors in the targeted area. d. different from those that need to be developed and superior to those of competitors in the targeted area.

similar to those that need to be developed and superior to those of competitors in the targeted area.

Since Coca-Cola focuses on selling only soft drinks, a low degree of product diversification, we would conclude that they compete in a(n) ________ market versus their main competitor PepsiCo, that sells a wide variety of products. a. single product b. multiple product c. related diversification d. unrelated diversification

single product

In recent years a growing number of U.S. consumers have become more health-conscious about what they eat. According to the PESTEL Framework this trend could best be classified as a ________ trend. a. healthy eating b. legal c. sociocultural d. political

sociocultural

In order to better achieve a competitive advantage, firms must now adopt a holistic approach towards satisfying multiple stakeholders opposed to focusing on the needs of their stockholders. This integrative approach is referred to as a. internal shareholder strategy b. stakeholder strategy c. integration strategy d. exchange relationship strategy

stakeholder strategy

Bill's Hockey Pucks Inc. wishes to pursue international markets like China. In order to do this, they may wish to consider a possible a. government partnership that may lead to lobbying. b. marketing strategy that strengthens the international value chain. c. strategic alliance with another firm already established in those markets. d. hostile takeover with a firm operating in the United States.

strategic alliance with another firm already established in those markets.

A voluntary arrangement between firms that involves the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services is best described as a a. cooperative. b. strategic alliance. c. proprietorship. d. leveraged buyout.

strategic alliance.

The former CEO of Sam's Club, a division with its own profit-and-loss responsibility, Rosalind Brewer, reported to Walmart's CEO, C. Douglas McMillon, who as corporate executive oversees Walmart's entire operations. Sam's Club, therefore, is a ________ of Walmart. a. strategic business unit b. house brand manufacturer c. branch office d. corporate partner

strategic business unit

________ is best described as an integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage. a. integrated technology management b. supply chain management c. inventory management d. strategic management

strategic management

________ 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. competency management c. strategy d. credo

strategy

We Ensure Inc., an insurance firm, replaced its existing project management software with new software from another supplier. Since the new software has different features and abilities, We Ensure has had to spend $10,000 on training its employees to use it. In this scenario, $10,000 represents We Ensure's a. octroi charge b. excise duty c. opportunity cost d. switching cost

switching cost

Which of the following frameworks used to measure competitive advantage relies on both an internal and an external view of a firm? a. the shareholder value creation model b. the balanced-scorecard model c. the accounting profitability model d. the economic value creation model

the balanced-scorecard model

In order for a firm to formulate an effective business-level strategy, it is important to remember that competitive advantage is determined by a. the characteristics of both the industry and the firm. b. the characteristics of the firm alone. c. the characteristics of the industry in which a firm competes. d. the amount of market share a firm can gain.

the characteristics of both the industry and the firm.

STRIKEBYTE Inc. is a software company that has built and acquired numerous assets over the years. According to the resource-based view of a firm, which of the following assets of STRIKEBYTE Inc. will best enable it to gain and sustain a competitive advantage? a. the expertise acquired by the employees in the company b. the cloud computing service that it uses c. the capital the company raised from its shareholders d. the headquarters building owned by the company

the expertise acquired by the employees in the company

What is horizontal integration? a. the process of acquiring a competitor at a higher stage of the value chain b. the process of merging with a competitor at the same stage of the value chain c. the process of acquiring a competitor at a lower stage of the value chain d. the process of merging with a competitor at a different stage of the value chain

the process of merging with a competitor at the same stage of the value chain

The management of a company is assessing the value of all the tangible resources the company owns. Which of the following will be included in this assessment? a. the punch presses that produce parts. b. patents for electronic components. c. a reputation for fast company service. d. a culture of proactive communication.

the punch presses that produce parts.

One of the reasons that big box retailers like Home Depot are able to achieve economies of scale is that a. they are able to take advantage of physical properties and maximize their scale efficiencies by stocking more merchandise and handling inventory more efficiently. b. they are able to take advantage of market size and spread investment losses over many locations. c. they have been able to protect themselves from the threat of buyer power by increasing input prices. d. they have both broad and narrow economies of scope.

they are able to take advantage of physical properties and maximize their scale efficiencies by stocking more merchandise and handling inventory more efficiently.

Decisions relating to "what stages of the industry value chain to participate in" determine a firm's a. competitive strategy b. vertical integration c. level of diversification d. geographic scope

vertical integration

When does a merger between companies typically occur? a. when a target firm does not want to be acquired b. when large, incumbent firms buy start-up companies c. when two firms of comparable size join to form a combined entity d. when two or more firms enter a temporary vertical strategic alliance

when two firms of comparable size join to form a combined entity