Bcomm test 1
BizTechno Inc. has always retained competitive advantage over its competitors. The company has offered customer satisfaction for many years by providing the best services and benefits for them. The resources, capabilities, and the organizational structure of the organization have also created an increased edge over its competitors. Which of the following does this scenario best illustrate?
Business model
___________ is a plan or set of activities implemented by a company to offer unique value and generate revenue and make a profit from operations.
Business model
_________ products are defined as those products that can be used in tandem with those from another industry.
Complimentary
Crimson Corp., designs its products based on the demographics of its customers. Jaded Inc. designs its products based on product attributes. Which of the following is likely to be true in this case?
Crimson is unlikely to consider customizability of products as the primary factor for customer segmentation.
A business strategy is defined as a plan to achieve competitive advantage that involves making four strategic choices. Which of the following is NOT one of these strategic choices?
Deciding which markets to take over
The experience curve does a better job of capturing the effects of economies of scale than a learning curve does, because it includes only labor costs.
False
When a company chooses a low cost strategy, it will be successful by keeping its focus on cost to the exclusion of everything else.
False
What is VRIO used for?
To assess whether a resource or capability is likely to create a competitive advantage
What "job(s)" did the morning customers buy milkshakes for in the Clayton Christenson example?
To be able to use one hand for the commute to work and keep them busy and full for a longer period
Which of the following is NOT a way to differentiate with product features?
To have products that do less-expensive job
Historically, which company has differentiated through quality or reliability?
Toyota
Which of the following statements regarding industry attractiveness is incorrect?
Trends that might change any of the five forces in an industry all come from the general environment.
Which of the following is defined as the reason a firm wins with customers or the value proposition it offers to customers?
Unique value
The quick and dirty test addresses the:
assumptions that must be true for the solution to be valid
The airline industry is a profitable industry. The firms in this industry create barriers to entry through patents and regulations in order to reduce the threat of new entrants. It also minimizes the threat of substitutes while keeping rivalry to a minimum. The airline industry can be best categorized as a(n) _________.
attractive industry
A strategy whereby companies attempt to gain competitive advantage by offering value that is not available in other products or services or that other products don't do as well is known as ________.
product differentiation
Purple Inc., an interior design company, offers its clients unique design solutions. Clients can choose from Purple's in-house products, customize them to meet their needs, and see how their home would appear using a 3D visualization software in a mini theatre at Purple's office. This gives Purple a competitive advantage over its rivals since none of them offer this unique combination of services. Purple's advantage is due to its __________.
product differentiation strategy
Resources that create ________ can be defined as those that create economic value for a firm.
profits
Which of the following is not a type of business platform?
relations
According to the _____________, each company is a collection of resources and competencies that are deployed to deliver unique value.
resource-based model
Erik, the CEO of Indigo Inc. wants to improve the efficiency and effectiveness of his company. In order to do this, he lists out the assets and knowledge Indigo has acquired over the years. Erik also analyzes the company's processes and its overall culture. The factor of production that Erik is studying can be best categorized as ________.
resources
Competition among firms within an industry best defines the term ________.
rivalry
The companies LaceThings Inc. and BellePrints Corp. sell the same product. They constantly try to outdo each other in terms of resources, price, and customer satisfaction. The companies try to outperform each other in order to gain customer loyalty and generate more sales. This scenario is an example of ________.
rivalry
Porter suggested generic strategies can be defined by:
scope of strategy and source of competitive advantage
Dividing up customers into groups based on similar needs or wants is known is a(n) _________.
segmentation analysis
Which PEST factor impacts a company if they give cash bonuses on wedding anniversaries and dating allowances for unmarried employees?
socio-cultural
The general environment is made up of eight categories but does not include _________.
substitute products or services
Barriers that help keep firms using the same supplier or buyer by imposing extra costs for changing suppliers or buyers are called ________.
switching costs
Steve Jobs possessed a(n) _________ to be able to spot great design in a product.
tacit knowledge
Successful companies determine where to compete based on _____________.
the company's ability to prevent imitation
As a company experiences economies of scale,
the cost per unit decreases with increases in volume.
What is the reason for companies offering both low cost and differentiation strategies at the same time?
the digital economy
Value is usually created when ________.
the end user enjoys direct pleasure and satisfaction from a company's product
An experience curve plots how the cost of production changes based on the _____.
total amount of experience you have producing that product or service
What type of business platform is Uber?
transaction
A survey is conducted among the customers of a supermarket chain. This survey reveals that the majority of customers prefer to buy Lia, a brand of soap. The reason for the customers' preference is because the company constantly delivers what it promises. In this scenario, the factor that has made the brand of soap named Lia popular among these customers can be best categorized as __________.
value
VisionZed Inc., a computer software company, spends a lot of finances on research. It tries to implement the latest technologies available and provides services that are matchless when compared to any of its competitors. At the same time, Xtron Technologies Corp., another computer software company, pays half the price that VisionZed pays on research as it combines the intelligence of different software companies and creates its product. This enables Xtron to have a cost advantage over VisionZed. Xtron Technologies Corp. is an example of a company that eliminates steps in the _____.
value chain
A scale curve plots how cost of production change with the _____.
volume of production
Great generals/CEOs think about the ______.
whole
Low cost and differentiation strategies cannot be offered simultaneously.
False
Porter's five forces have no limitations when conducting an industry analysis.
False
Steve Jobs was a key capability to the success of Apple.
False
The calculation for net promoter score is:
% promoters - % detractors
Which of the following statements regarding product differentiation is incorrect?
A lower price is typically necessary because attempts to differentiate products usually require companies to invest resources that decrease the cost of their offering.
The employees at Voyage Ink Corp. were asked to draw a chart that explains the elements which go into making one of their products. They were asked to create a diagram showing the different types of materials that help create the whole product. Which of the following are the employees at Voyage Ink Corp. creating in this scenario?
A value chain
Which one of the following is not a way to lower input costs?
Building a new business model
Every "job" has three dimensions. Which of the following is NOT one of those three dimensions
Aesthetical functional social and emotional are
Why did Amazon's business model give such a large cost advantage to the company?
Amazon sold books in a completely different way—over the Internet - and had much lower costs by eliminating superstores
What is meant by diseconomies of scale?
An increase in marginal cost when output is increased
Which of the following does NOT provide criteria for market segmentation?
Attributes of competitors
Which of the following describes when a firm purchases one or more of its suppliers in order to make a product itself rather than buying it from another firm?
Backward integration
Why, on average, an attractive market (from a five-forces perspective) is the least attractive market for a new entrant?
Barriers to entry make it difficult for a new entrant to establish itself
_________ is defined as products that are differentiated through marketing, via advertisements, promotions, and other marketing activities.
Brand image
In 2006, how did Disney finally defend itself from Pixar's cutting-edge CGA capabilities?
Buying Pixar
How does a firm achieve a cost advantage by using an entirely different business model?
By eliminating activities or steps in the value chain or performing different activities altogether
Based on the text, how can a company figure out how to deliver unique value from differentiation?
By embracing new thinking about achieving low cost and differentiation and assessing differentiation performance
How should a company identify the industry they compete in, and therefore their competitors?
By identifying the job that their products do for customers
________ can be best defined as when an organization generates higher profits compared to its rivals.
Competitive advantage
McDonald's can be found on many street corners in cities across the world. Because of its many locations, McDonald's is differentiated through _________.
Convenience
What is the difference between strategy at the three different levels of the organization?
Corporate strategy refers to decision about where to compete, whereas business unit strategy refers to decisions about how to gain and sustain a competitive advantage
Which of the following is a strategy in which the unique value offered to customers is lower-priced products or services?
Cost advantage strategy
Why is Oswald the Lucky Rabbit not a well-known Disney character today?
Disney did not hold the rights to the Oswald character.
Why do companies with strong dynamic capabilities have a more secure foundation for competitive advantage than those without them?
Dynamic capabilities entail complex connections and coordination that take time to create and learn
Which of the following refers to a plan or pattern of action that develops over time in an organization despite a mission or goals?
Emergent strategy
Interestingly, the five forces that shape industry competition are not subject to change so the firms can plan accordingly.
False
Why should we care about internal analysis?
External analysis is often incomplete and Some research suggests internal factors explain more of the variance in company profitability than external factors
Which of the following was NOT a "differentiating" factor for Facebook over MySpace?
Facebook was more customizable.
A PEST analysis allows a company to evaluate the attractiveness of a specific industry, but not the larger global environment.
False
A SWOT analysis is a strategic planning method used to evaluate the strengths, weaknesses, objectives, and theories involved in a business.
False
A functional strategy consists of decisions about how to gain and sustain advantage, made at the manager level for each standalone business unit within a company.
False
A higher threat of new entrants is good for industry incumbents.
False
According to Mintzberg, your planned strategy is more important than what you actually end up doing.
False
Being in the best industry guarantees outstanding profits.
False
Companies adopting a cost advantage strategy should focus on cost to the exclusion of everything else.
False
Core competencies are the resources and capabilities that are similar between companies competing in the same industry.
False
Which of the following industries would be considered attractive/profitable?
Firms in this industry have minimized the threat of substitute products.
Fixed costs of production are spread from a higher volume of sales
Fixed costs of production are spread from a higher volume of sales
For a luxury high-end product, which of three "job" dimensions is not as important?
Functional
Which of the following includes decisions about how to effectively implement the business unit strategy within functional areas like finance, product development, operations, information technology, sales and marketing, and customer service?
Functional strategy
Where does IKEA compete?
Global low-end furniture market
Competitive advantages are durable and sustainable when resources or capabilities possess which two of the four VRIO attributes?
Inimitability and organization to exploit profits
Which of the following is true of a tangible resource?
It has a physical presence such as land, machinery, and cash.
Which of the following is an advantage of the value chain?
It helps to identify which activities represent a firm's competitive strength.
Which of the following statements is true of a value chain?
It is a method of depicting and evaluating the activities performed by a company.
Which of the following best describes rarity?
It is an attribute of a resource which means to be uncommon, or not available to other competitors.
Which of the following is necessary for a product to be considered reliable?
It needs to last longer than products offered by other firms in the market.
Time-Threads Inc. sells storage devices, such as memory cards, thumb drives, and external hard disks. Which of the following is most likely true if it achieves product differentiation by designing its products to perform more jobs than its competitors?
Its hard disks are designed for quicker copying of files from various mediums.
The management of Earth Network Inc., a cell phone company, wants to conduct an overall study of the company. The top officials want to identify Earth Network's competencies, limitations that the company needs to improve on, areas of growth, as well as the areas that the company should completely avoid. The managers feel that this study will help them advance as an organization. This study to be conducted by the management of Earth Network Inc. can be best categorized as an example of a ________.
SWOT analysis
"Practice makes perfect" applies to which cost advantage?
Learning and experience
Which are the two "generic strategies" for offering unique value?
Low cost or differentiation
Which one of the following is NOT an internal factor?
Market trends
_________ is when a company produces in bulk the various modules of a product and then allows the customer to select which modules will be combined together.
Mass customization
Which of the following represents a company's primary purpose that often specifies the business or businesses in which the firm intends to compete—or the customers it intends to serve?
Mission
What company was used as an example of a poor outcome when not responding to competitors? This company was eventually purchased by Microsoft.
Nokia
A company's employees make up which of the four primary stakeholder groups?
Organizational stakeholders
What barriers make it costly for competitors to imitate?
Path dependence Causal ambiguity Social complexity
How did Amazon create a different business model?
Performing different activities altogether
A company's suppliers make up which of the four primary stakeholder groups?
Product market stakeholders
Substitutes are:
Products/services that perform a similar function as an industry's products/services by different means
A patent makes a product:
Rare
Katherine is the CEO of a car dealership company called Red Cars. When looking for new investors for the company, she usually says that Red Cars wants to "Be the best automotive retailer in the eyes of its customers, employees, and shareholders." Which of the following does this statement best reflect?
Red Cars' mission
What exactly are internal factors?
Resources and capabilities that allow companies to deliver unique value to customers
What is the difference between resources and capabilities?
Resources are assets (tangible or intangible) whereas capabilities are processes or ways a company uses resources towards an end goal.
What is the difference between resources and capabilities?
Resources are assets a firm employs to create value; capabilities represent the processes a firm uses
How do low exit barriers affect rivalry?
Rivalry decreases
How do high levels of unused production capacity affect rivalry?
Rivalry increases
Which correctly lists Porter's five forces?
Rivalry, Buyer Power, Supplier Power, Entrants, Substitutes
Which capabilities are at the core of Starbucks's ability to deliver on a differentiation strategy?
Roasting coffee, choosing location and select baristas
_________ refer to society's cultural values, norms, and attitudes.
Social forces
Which of the following statements best describes a firm's resources?
They refer to what a firm employs to create value and competitive advantage.
Which of the following refers to the translation of a chosen strategy into organizational action so as to effectively apply the activities required to achieve strategic goals and objectives?
Strategy implementation
Internal analysis sheds light on which parts of SWOT?
Strengths and Weaknesses
What does the acronym SWOT stand for?
Strengths, Weaknesses, Opportunities, and Threats
MouseTag Inc. has incorporated a new type of technology that has increased the potential of the company by two-fold. Its machinery can now work faster and produce more products in a day than any of its previous machines ever could. This has also helped increase the profits of the company. Which of the following trends does this scenario best illustrate?
Technology change
The automotive industry would be considered an "unattractive market" when using the Five Forces model of analyzing the external environment. Which is an example of a company that successfully entered an unattractive market by offering a unique value?
Tesla
Hercules Inc. is a high performing steel manufacturing company. Chang, a stakeholder of the company, believes that it is important to protect the company from threats. Hercules Inc. has often struggled to overcome rivalry and product substitutes. Chang claims that if the company constantly keeps a check on itself by creating power over buyers, paying heed to customers' requests, and strengthening its resources and manpower, the company can maintain competitive advantage. Which of the following statements strengthens Chang's claim?
The company can face first-time conflicts if it is not well prepared with a sound method to retain competitive advantage.
Which of the following statements is true of research and development (R&D)?
The higher a firm's R&D costs, the more the scope for the company to expand globally allowing costs to be spread across more customers.
What product, introduced in 2001, helped Apple become more successful?
The iPod
A PEST analysis can help a company break free of old assumptions about how managers should run organizations.
True
A competitive advantage is when a company achieves higher profit than the average competitor.
True
A good business solution gives the actions a company should take to achieve its objectives.
True
According to consultant and researcher Fred Reichheld, the answer to the question, "What metric can I use to assess how well my differentiation strategy is working?" lies in whether you can satisfy customers to such a degree that they are willing to recommend your company (or product) to a friend or colleague.
True
Hyundai is more of potential entrant rather than a direct competitor to BMW.
True
In most industries there is a strong correlation between market share and profitability.
True
Increased rivalry tends to squeeze profit margins of most firms in an industry.
True
It is just as important for a company to figure out how to deliver unique value to customers, as it is to identify what unique value to offer to customers.
True
Large firms may be at a disadvantage during economic downturns because they have more difficulty spreading fixed costs when demand declines.
True
Market attractiveness depends on the entrant's resources and capabilities.
True
Scale is how many units you produce or sell during a time period.
True
Tata Nano represents how a company can be the low-cost producer through proprietary knowledge.
True
The net promoter score helps determine if the differentiation strategy is working.
True
Timing matters in strategy.
True
Two products with the exact same technical features can be differentiated because of customer perception.
True
Virgin Cola failed due to its similarity with competitors in the job to be done level.
True
Where you compete is the starting point for strategic analysis.
True
Which of the following statements is true about customer needs?
Understanding them can be very helpful in defining the boundaries of an industry.
What does VRIO stand for?
Valuable, Rare, Imitate, Organized
Competitive advantages arise when resources or capabilities possess which two of the four VRIO attributes?
Value and rareness
What key question can you use to help define an industry and determine your direct competitors?
What job are customers hiring our product/service to do?
Generally, how does the number of buyers affect buyer power?
When there are few buyers, buyer power is high.
Corporate strategy focuses on which of the 4 strategic choices?
Where to compete
A good strategy provides clear answers to four key questions. Which one of the following is NOT one of the four questions?
Where will we be as a company in 10 years?
If a company increases volume beyond the minimum efficient scale, the company will experience
both dis-economies of scale and an increase in cost per unit of production.
SunLite Corp. runs fitness centers which are owned by the parent company Cyan Inc. Ryan, the manager of Cyan Inc., needs to decide on how to overcome competition by other fitness centers. He finally decides to bring in advanced facilities, such as imported gym equipment, to give faster results and keep SunLite centers open for patrons 24x7. Ryan feels that this will allow the company to gain more profits. This scenario best illustrates a ________.
business unit strategy
Inputs include
capital
Clearly defining your industry tells you where you _______.
compete
Gems Corp. is a leading jewelry brand that finds it hard to make as much profit as its competitors. In order to overcome this, the employees of Gems Corp. decide to work harder to provide unique value to customers and increase the sales of the company. After a year, it is able to make more profits than its competitors. This scenario best illustrates ________.
competitive advantage
Companies that have value but don't possess the other VRIO attributes experience __________.
competitive parity
Products that can be used in tandem with those from another industry best define the term ________.
complementary products
The owners of Carpo Inc., a watch company, also own a steel company and a leather goods manufacturing company. This relieves them from expenses that they would have to bear, if they had to rely on outside sources for the raw materials needed to make their watches. This enables the company to produce watches at a much lesser cost than other companies in the industry. This scenario best illustrates a ________.
cost advantage
Orange Superstore is largely customer centric and economical in its methods. The store sells the best quality products at prices that are lower than other stores. The store depends on the fact that its salespeople get better at completing their tasks over time. This method used by Orange Superstore is an example of _____.
cost advantage strategy
The information you need to calculate an experience curve includes all of the following EXCEPT:
cost of materials. information needed to calculate:cost per unit period of time levels of cumulative volume produced
In a service industry, which of the following is plotted?
cost per customer served at different volumes
It is important to remember that product differentiation is always a matter of _________.
customer perception
A _________ advantage is an advantage a firm has over its competitors by making a product more attractive by offering unique qualities in the form of features, reliability, and convenience that distinguishes it from competing products.
differentiation
Which generic strategy is used if a company targets a narrow segment with a unique offering?
differentiation focus
What has changed on the customer side to enhance business strategies?
direct digital relationships with customers
The management at WonderPlanners Inc. wants to improve their production and operating capabilities by adopting a leaner process. As such, the employees of WonderPlanners are asked to eliminate the excess use of efforts and materials. WonderPlanners Inc. finally manages to achieve a competitive advantage after its employees follow these new practices repeatedly over time. From the information given in this scenario, we can infer that WonderPlanners Inc. has developed __________.
dynamic capabilities
Taurus Inc. usually produces 5,000 handcrafted products in a day. Recently, the demand for handcrafted products drastically increased as one of its products became a popular item for home décor. Due to this increase, the company had to up its production level to 10,000 products per day. This, however, decreased the price of individual products. This scenario best illustrates _____.
economies of scale
When the average total cost of production decreases as a result of increasing the number of different goods produced, it is known as
economies of scope.
Apple's move to the iPod, iPhone, and then iPad is an example of a(n) _________ strategy?
emergent
The management of Winters Corp., a small company, pursued an unexpected opportunity and gained huge profits over a period of 10 years. At the end of this period, Winters Corp. grew as a company and successfully established itself as a highly valued brand in the industry. This is an example of a(n) ________.
emergent strategy
Which of the following is not a step used to solve business problems?
evaluate solutions
A representation of the relationship between cumulative volume and product cost is known as the
experience curve.
The _________ examines the forces that influence industry attractiveness, including opportunities and threats that exist in the environment.
external analysis
Bright Inc. is a toothpaste manufacturing company that is facing intense competition from its rivals. In order to encourage higher consumption of its products and to maximize retention of existing consumers, Bright introduced sweepstakes as a consumer sales promotion strategy. However, its rivals retaliated by introducing deals such as rebates, price discounts and bonus size offers. This scenario best illustrates a ________.
fragmented industry
Candidate solutions should be ordered:
from highest to lowest impact
If data is not available to support an assumption, a company can use all of the following except:
historical data
What does a net promoter score measure?
how likely customers are to recommend this company to someone
Which of the following is not one of the questions of strategy?
how you will relate to customers
LuxeDrive Inc. is an automobile company with minimal competition due to features that set it apart from other automobile companies. These features act as qualifications that rival companies find difficult replicate. This scenario can be best categorized as an example of __________.
inimitability
When deciding where to compete, a company must look at:
its own resources and capabilities
According to the video, competition occurs at which level?
job to be done
How do companies effectively innovate and change?
leverage resources to add new value for customers
Which of the following is not a key step in a PEST analysis?
list the components of each factor that impact your business
Tracie, the CEO of Bonney's Inc., wanted to analyze what customers think of their products. She began her survey by finding out how her customers become aware of their needs, how they find the products, how they purchase products, and how the products are serviced or repaired. These steps are part of ________.
mapping the consumption chain
The industry and geographic area that a company competes in, is referred to as its ________.
market
Fragmented industries tend to have _________ competitors and _________ intense rivalry.
more; more
According to Reichheld, a customer scoring an 8 would be considered __________.
neutral
Dell offers similar products as competitors to a broad customer base. Which generic strategy are they using?
overall cost leadership
Offering products that customers really want at higher prices requires a _____ generic strategy?
overall differentiation
The scale/experience curve reveals the _____ for every doubling of cumulative output.
percentage cost decrease
A company must target its resources and capabilities at nailing a customer's specific jobs to be done. Which of the following is not one of those jobs?
personal
Fixed costs of production include
plant and equipment.
The learning curve is the idea that
practice makes perfect.