BAMG 456 Strategic Management Chapter 1 - 5

Which of the following is an advantage of accounting data?

Accounting data consider off-balance sheet items, which makes comparing companies with different capital structures easy. Correct! Accounting data can be easily transformed into financial ratios to help assess and evaluate the competitive performance of firms. Accounting data focus mainly on intangible assets, which are more important than tangible assets in firms' stock market valuations. Accounting profitability ratios not only show us the outcomes from past decisions, but also provide information to guarantee future performance.

________ tends to be more fierce when exit barriers in the industry are high, resulting in some firms being locked into the industry.

Co-opetition Strategic Commitments Correct! Competitive rivalry Strategic complements

Which of the following is a disadvantage of the balanced scorecard approach to measure firm performance?

Correct! It provides only limited guidance about which performance metrics to choose. It only relies on an internal view of the firm, ignoring the external view. It fails to allow managers and executives to find a balance between financial and strategic goals. It fails to allow managers to align their different perspectives to create a more focused corporation overall.

How do complements affect a primary product or service?

Correct! They increase the demand for the primary product. They lower the utility of the primary product. They act as the strategic equivalent of the primary product. They reduce the value of the primary product.

The tenet behind the triple bottom line is that?

Correct! a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy. a firm's primary objective should be increasing the total returns to its shareholders. a firm's return on revenue can be broken down into three ratios: COGS/Revenue, R&D/Revenue, and SG&A/Revenue. a firm should solely focus on increasing the economic value created for its customers.

In the context of the VRIO framework, a resource is said to be valuable if it

Correct! allows a firm to take advantage of an external opportunity. leads to competitive parity within an industry. results in a perfectly competitive industry structure. helps a firm increase its costs but lower its prices.

In the dynamic capabilities perspective, for an asset or a capability to be included in a firm's resource stock, it should be

Correct! built through investments over time. commonly shared by other firms in the same industry. capable of reducing the barriers to entry in an industry. readily available for purchase using cash.

Strategic-group mapping establishes that

Correct! competitive rivalry is strongest between firms that are within the same strategic group. rivals inside a strategic group serve different customers. competitive pressures within an industry are similar among all strategic groups. product features and prices are irrelevant to a strategic group.

Economic contribution is created when the __________________? Hint: in class we described this in terms of the value chain.

Correct! price a customer is willing to pay for a good or service is more than the cost the firm incurs to produce it. revenue generated by selling a unit of a product is equal to the cost incurred by the firm in producing it. value a consumer attaches to a good or service is lesser than what he or she paid for it. price a customer is willing to pay for a good is less than what it costs the firm to manufacture it.

Which of the following has contributed to Tesla's competitive advantage in terms of stock appreciation?

Correct! reinvesting profits to continually design and produce better electric vehicles using inexpensive materials to keep costs low copying the most popular features of competitors' vehicles keeping its proprietary technologies secret

According to our case discussion in class you can infer that Apple's financial growth is ________ in recent years?

Correct! slowing increasing flat the same as microsoft's

In class your professor described that in started the deal site business they changed from a _________ business model to a __________ business model.

Correct! subscription, freemium direct to consumer, platform razorblade, platform razorblade, freemium

The auditor of a public company is assessing the value of all the intangible assets owned by the company. Which of the following would most likely be included in this assessment?

Correct! the company's brand equity the company's plant and equipment the company's cash reserves the company's headquarters

According to your professor, a a unique strength (core competency) at the online deal site RoverTown was?

Correct! their programer their ability to attract money from investors complementors in the hair regrowth industry their fantastic grades

When a firm integrates the competitive strategies of cost-leadership and differentiation, it will most likely result in

Correct! trade-offs that work against each other. a competitive advantage through superior performance. competitive parity with firms that have adopted either of the strategies. an increase in the firm's economic contribution.

A company's vision primarily states

Correct! what the company wants to ultimately accomplish. how the company plans to compete in its industry. how the company plans to accomplish its goals. what the company actually does to generate revenues.

Which of the following is a feature of a fragmented industry?

It allows firms to set prices. One large firm dominates the industry. Correct! It consists of many small firms. It tends to generate high profitability.

In the financial year 2016, for every $100 in revenues, Microsoft earned $21.5 in profit, while Apple earned $20.6 in profit. This demonstrates that

Microsoft was using its capital more efficiently to generate revenue than Apple. Correct! Microsoft's return on revenue was higher than that of Apple. Apple's inventory turnover was more than that of Microsoft's. Microsoft was more efficient than Apple in producing its goods.

From our case discussion in class Wednesday, we described that in addition to competing with Apple, Microsoft is largely competing with? Hint: this is one of the reasons for Satya Nadella's new strategy.

Samsung's open access operating system IBM Intel Correct! cloud based software

________ is an important tool because it allows a manager to recognize, prioritize and address the needs of various stakeholders.

Shareholder Right's Plan Stockholder appreciation Correct! Stakeholder impact analysis Shareholder voting proxies

Generally speaking, which of these situations is likely to lead to greater profits?

a fragmented industry rather than a consolidated one Correct! an industry with fewer but larger competitors a situation that encourages operating at excess capacity an industry that is about to undergo deregulation

MicroChips Corp. is a company that supplies microprocessors to 2020 Processors Inc., a computer hardware company. When 2020 Processors Inc. demands lower prices for the microprocessors, MicroChips Corp. makes it clear that it would profit more from launching its own brand of laptops and desktops in the market. Fearing the competition it would then face from MicroChips Corp., 2020 Processors Inc. decides to buy the microprocessors at the quoted price itself. In this scenario, MicroChips Corp., as a supplier, has exercised its bargaining power by threatening to

crowdsource. outsource. backward integrate. Correct! forward integrate.

Restrictions imposed by the government, such as export quotas on certain products, are a part of the ________ environment of the PESTEL framework.

ecological Correct! political economic sociocultural

According to your professor ___________ is/are one of the best ways a business can increase its economic value creation.

financial ratios bundling goods and services Correct! business model innovations the balanced scorecard

ABC Hardrives Inc., All Digital Inc., and FastFax Corp. are all companies that manufacture and sell consumer electronics. They procure their component parts from a similar set of suppliers in China and sell the final product to customers with similar needs. Thus, the three companies together are a part of a(n)

focus group. Correct! industry. occupational group. plant.

In class we said that the company Evolve is expanding its value chain by?

forward integration to buy out their suppliers capturing their competitors through a blue ocean netting strategy raising money from both traditional venture capital (suppliers) as well as ESOP plans (customers) Correct! capturing value from suppliers (landlords) and customers (renters)

A diagnosis of the competitive challenge, an element of a good strategy, is primarily accomplished through strategy_________ ?

implementation Correct! analysis control formulation

The greater the difference between value creation and cost, the...

less likely that a firm's strategic position will be competitive. Correct! greater a firm's economic contribution. less likely a firm will gain competitive advantage. greater a firm's competitive parity.

Patents, designs, copyrights, trademarks, and trade secrets are five forms of

path dependence. Correct! intellectual property. social complexity. causal ambiguity.

For a firm to sustain its competitive advantage, any fit between its internal strengths and the external environment must be

permanent. Correct! dynamic. valuable. static.

Which of the following is not one of the VRIO characteristics of competitive advantage?

rare organized to capture value costly to imitate Correct! variable

Using the _______, managers can see how competitive advantage flows from a firm's distinct set of activities. (hint: we discussed this in describing the co-opition model)

resource-based view VRIO framework SWOT analysis Correct! value chain analysis

If a company has 25 million shares outstanding, and each share is traded at $400, the ________ is $10 billion.

return on revenue customer lifetime value Correct! market capitalization total return to shareholders

Which of the following is an example of a firm's capabilities?

routine activities performed in the firm, like physical delivery of products assets such as plant and machinery owned by the firm specific tasks involved in the invoicing of customers Correct! skills involved in training and managing a workforce

All of the following are examples of internal stakeholders except.

stockholders. board members. employees. Correct! suppliers.

Which of the following does a firm possess when it can outperform other firms in the same industry or the industry average over a prolonged period of time?

strategic positioning consistent power position Correct! sustainable competitive advantage long-term capital gain

Some scholars have added a sixth force to Porter's Five Forces model. This sixth force, ________, is believed to add value to the original product offering (or service) when the two are used in tandem. Hint: your professor thinks the book doesn't cover this enough... though it should be included as part of a Value Net, not in Porter's Five Forces model!

technological factor Correct! complement mobility barrier value chain

Which of the following SWOT factors are internal to the firm?

threats and strengths weaknesses and opportunities opportunities and threats Correct! strengths and weaknesses

In class we said that according to Co-opitition Theory you should define a competitor from a ____________ perspective

top management team's executive's Correct! customer's company's

When an organization briefly describes what they do and how they do it, they have more than likely articulated their

values statement. strategic plan. strategic intent. Correct! mission statement.