B BUS 470B: Strategic Management and Project Management

Which of the following statements about organizational knowledge is correct?

- Knowledge is an intangible resource - The importance of knowledge is increasing - The value of knowledge as a proportion of shareholder value is increasing.

Customer defection rates are

- an indication of a company's ability to satisfy is customers - important to consider because of their potential impact on advertising and marketing costs - an important consideration because of their effect on sales volumes - a reflection of customer loyalty

Value consists of

A product's performance characteristics and by its attributes for which customers are willing to pay.

Criticism of 3M's reduced spending on research and development represent concerns over what?

A reduction in the firms capability for innovation.

An effective business model

A) involves how a company selects its customers. B) creates value for its customers. - achieves and sustains a high level of profitability. - produces goods and services

According to Porter, what is usually the most powerful of the five competitive forces?

Bargaining power of consumers

What is not one of Michael Porter's five competitive forces?

Bargaining power of unions

A firm's strengths that cannot be easily matched or imitated by competitors are called

Distinctive Competencies

A business model is not directly connected to how a firm makes money.

False

A high threat of new entrants keeps pricing pressures on existing firms, keeping consumers happy and making the industry attractive and profitable.

False

A vision statement answers the question, "What is our business?," whereas a mission statement answers, "What do we want to become?"

False

A vision statement is, in essence, a company's game plan.

False

Although a useful step in the strategic management process, value chain analysis can rarely help a firm monitor whether its prices and costs are competitive.

False

Analysis of the firm's internal organization examines the firm's portfolio of resources but excludes the bundles of heterogeneous resources and capabilities.

False

Bargaining power of consumers is usually the most powerful of Porter's five competitive forces.

False

Capabilities can be developed quickly in response to changes in the new competitive landscape.

False

Compared to tangible resources, intangible resources are an inferior source of core competencies.

False

Eavesdropping is an ethical way to obtain information about competitors' actions.

False

Every core competence is a capability and every capability is a core competence.

False

External environmental analysis should be conducted annually

False

Firms that compete within a strategic group rarely use similar competitive strategies

False

Generally, the stronger the competitive forces, the higher the profit potential of an industry.

False

In the global economy, traditional factors such as labor costs, access to financial resources and raw materials, and protected or regulated markets are no longer sources of competitive advantage.

False

Increasing absorptive capacity, or the ability of a company to identify, value, assimilate, and use new knowledge is an essential function of Product development Teams

False

Monitoring involves the development of a forecast of what might happen at a future point in time.

False

Once a firm acquires a competitive advantage, they are usually able to sustain the competitive advantage for an extended period of time.

False

Opportunities are a firm's distinctive competencies that cannot be easily matched or imitated by competitors.

False

Organizational culture refers to the core values shared by the firm's top-level managers but not necessarily accepted by lower-level employees who are often transitory and not committed to the organization.

False

Organizational stakeholders are the firm's internal resources, capabilities, and core competencies that are used to accomplish what may at first appear to be unattainable goals in the competitive environment.

False

Organizational vision and mission serve as emotional tools for the firm, and, as such, have little impact on firm performance.

False

Political, governmental, and legal factors are considered key threats for most small and large organizations.

False

The aim of an external audit is to develop an exhaustive list of every possible factor that could influence the business.

False

The controlling function of management is synonymous to strategy formulation.

False

The essential core of strategy is doing the same thing as your rivals but being more effective at it.

False

The goal of strategic management is to develop a competitive advantage that is permanently sustainable.

False

The mission statement should be short—preferably one sentence.

False

The underlying industry structure has little effect on individual firms' competitive conduct.

False

There are three generic business level strategies.

False

To pursue a cost leadership strategy, strategic managers need to incorporate all the latest technology into their products.

False

Top-down strategic planning works best in more uncertain situations because the firm hand of senior leadership is best at seeing the future.

False

Under the value chain concept, only primary activities add incremental value

False

Value is measured by the variable and fixed costs associated with the production and marketing of a particular product compared with the revenue and profits the product generates.

False

While Information Systems (IS) have greatly improved externally focused decision making, they have had little impact on lowering costs

False

Without strict governance mechanisms, the majority of executives will act in their own self-interest rather than acting as positive stewards of firm resources.

False

The primary role of Human resources in achieving superior innovation is

Hire talented scientists and engineers

What step in the strategic development process involves mobilizing employees and managers to put strategies into action?

Implementing strategy

The primary role of Material Management in achieving superior innovation is

No primary responsibility

Which of the following cognitive biases refers to the fact that decision makers who have strong prior beliefs about the relationship between two variables tend to make decisions on the basis of these beliefs, even when presented with evidence that their beliefs are wrong?

Prior hypothesis bias

The process that describes the method by which managers conceive of and implement a strategy that can lead to a sustainable competitive advantage is called what?

Strategic management

Competitive advantage typically leads to

Superior Profitability

The quality of Hyundai vehicles has increased dramatically. Its cars now rank at the top of the list in vehicle quality, exceeding even Toyota. To management's surprise, this has not led to an increase in sales. From the standpoint of capabilities, what can we conclude about Hyundai's quality?

The increased quality fails the "value" test.

Which of the following is not a characteristic of well-constructed goals?

They are the result of a group decision process.

The primary role of Infrastructure in achieving superior customer responsiveness is

Through leadership by example, build a wide commitment responsiveness to customers

A competitive advantage can be created when several resources are bundled together in a unique fashion.

True

A global mind-set is free of the assumptions of a single country, culture, or context.

True

An opportunity analysis is an appraisal of the costs, benefits and risks associated with marketing decisions.

True

Because the health of a nation's economy affects the performance of individual firms and industries, companies study the economic environment to identify changes, trends, and their strategic implications.

True

Creating customer value is the source of the firm's potential to earn above-average returns

True

Given enough time, any firm's competitive advantage can be imitated by its competitors.

True

High exit barriers are factors that cause a company to remain in an industry even though the profitability of doing may be questionable.

True

In both monopolistically competitive industries and oligopolistic industries, the ability to differentiate a product provides a firm with pricing power

True

In the implementation stage of scenario planning, managers will activate the dominant strategic plan.

True

In the long run, if an organization does not change it will fail.

True

Internal R&D and contract R&D are the two basic forms of R&D in organizations.

True

One of Matsushita's strengths is the ability to continue to improve employee productivity

True

Resources and capabilities can be a source of rigidity for the firm.

True

Shareholders are satisfied when return on investment has been maximized.

True

Strategic management is an attempt to organize qualitative and quantitative information in a way that allows effective decisions to be made under conditions of uncertainty.

True

The capacity to manage human intellect—and to convert it into useful products and services— is fast becoming the critical executive skill of the age.

True

The final result of successful strategic competitiveness is above-average returns.

True

The importance that a society places on universal access to healthcare would be considered part of the sociocultural aspect of the external environment.

True

The main competitive factor facing companies offering traditional telephone service is the existence of substitute products and services.

True

To perform an external audit, a company first must gather competitive intelligence and information about social, cultural, demographic, environmental, economic, political, legal, governmental and technological trends.

True

Value is created when the firm exploits its core competencies or competitive advantages to meet or exceed the demanding standards of global competition.

True

By exploiting their core competencies to meet or exceed the standards of global competition, firms create ______ for customers.

Value

The process whereby a firm determines the costs associated with organizational activities from purchasing raw materials to manufacturing products to marketing those products is called

Value Chain Analysis

A decision that results in failure

allows for learning.

Marina's new paint formulation builds on other product innovations to create paint with fewer toxic fumes. Marina's new paint is

an incremental innovation

An important first step in the process of formulating a company's mission is to

answer the question, "What is our business?"

Tangible resources include

assets that can be seen and quantified.

To provide a sustainable competitive advantage, a capability must satisfy all of the following criteria EXCEPT

be technologically innovative.

The focused differentiation strategy differs from the differentiation strategy in that

c. focused differentiators target a narrower customer market.

Internal analysis enables a firm to determine what the firm

can do

Sam Walton wanted Wal-Mart to keep costs low. Therefore, as an example to others, he drove his own car and furnished his office with plain, steel desks. In this case, Mr. Walton was displaying his

commitment.

The proper matching of what a firm can do with what it might do allows the firm to

develop its vision, pursue its mission, and select and implement its strategies.

The strategies that a company's managers pursue

have a major impact on the company's performance relative to its competitors

A firm's mission

is a statement of a firm's business in which it intends to compete and the customers it intends to serve.

To be effective, when should environmental analysis be conducted?

on an on-going basis

A company's infrastructure includes the company's

organization structure, culture, and style of leadership

Flexible manufacturing technologies allow companies to

produce small batches of customized products at a relatively low cost.

Above-average returns are

profits in excess of what an investor expects to earn from other investments with a similar level of risk.

Which of the following identified in an analysis of the general environment is an opportunity for an entrepreneur who wishes to open a business doing "Fitness for Life" physical conditioning services (strength, balance, and flexibility training) in a city of 100,000 people?

the average age of the population in his community is high

The five forces model suggests that an industry's profitability is a function of all the following factors EXCEPT

the economic environment.

The strategic management process is

the full set of commitments, decisions, and actions required for the firm to achieve above-average returns and strategic competitiveness.

Which of the following statements is most consistent under the I/O view? Performance of the firm is most directly attributable to

the profitability of the industry the firm competes in.

Competitive advantage typically comes from

the unique bundling of several resources.