BUS 450 Ch 7- 12 Quiz Questions
Which of the following firms is least integrated?
A firm that buys all the required raw materials from multiple external vendors
Which of the following best illustrates forward vertical integration?
A firm that manufactured and sold car engines to major automobile companies launches its own line of cars.
Curve Inc. is a software development firm based in California. It strives to provide highly differentiated software at cheaper prices when compared to its competitors. Which of the following organizational designs should Curve Inc. implement to ensure the maximum success of its business strategies?
Ambidextrous
Onico Inc., a luxury car company, sells the same cars and offers the same superior services in both its home country and foreign markets. The market it operates in faces low pressures for both local responsiveness and cost reductions. Which of the following strategies within the integration-responsiveness framework does Onico Inc. most likely pursue?
An international strategy
Neon Electronics Inc. sourced touchscreens required for its tablet computers cell phones and televisions from a manufacturer in China. But the demand for such components was high globally and the supplier could not meet the quality standards of Neon Electronics. Thus Neon Electronics decided to set up its own unit to develop and manufacture the required touchscreens. What does this scenario best illustrate?
Backward vertical integration
Which of the following has been a key driver for firms to expand globally during the globalization 3.0 stage?
Benefits from lower labor costs in manufacturing and services
GE has strengthened its competitiveness by creating a profitable business with its "green" ecomagination initiative which provides cleaner and more effective sources of energy. GE's ecomagination is an example of ____________.
Creating shared value
Food Works Inc. is a multinational fast food chain that follows a multidomestic strategy. Which of the following statements most likely holds true for the company?
Each country unit owned by the company will tend to be highly autonomous.
Food Works Inc. is a multinational fast food chain that follows a multidomestic strategy. Which of the following statements most likely holds true for the company?
Each country unit owned by the company will tend to be highly autonomous.
As the inventor of hypertension medication, OneSure Pharmaceuticals (OSP) Inc. was able to reap the benefits of economies of scale due to a large consumer demand for the drug. Even when competitors later developed similar drugs after the expiry of OSP's patents, regular users did not want to switch because they were concerned about possible side-effects. Which of the following benefits does this scenario best illustrate?
First-mover advantages
__________ is best described as changes in an industry value chain that involve moving ownership of activities closer to the end (customer) point of the value chain.
Forward vertical integration
Glova Inc., a company that manufactures and sells premium perfumes, is pursuing an international strategy. RightMart Inc., a supermarket chain, follows a multidomestic strategy. Which of the following statements is most likely true of this scenario?
Glova Inc. will sell the same products and services in both domestic and foreign markets, whereas RightMart Inc. will customize its product offerings to suit local requirements.
Which of the following statements is NOT true about innovation?
Innovation has to be high-tech in order to be a potent competitive weapon.
Which of the following statements is true of a disruptive innovation?
It invades the market from the bottom up, by first capturing the low end.
Cup N Cone Inc., a graphic design firm, has offices in New York, Texas, California, New Mexico, and New Jersey. Each of these offices is headed by a president who reports directly to Marvin Grey, the CEO. The heads of the centralized HR, Finance, and Marketing teams report to Marvin Grey as well. Managers in the various offices also report to the CEO directly. Based on this information, which of the following statements is most likely to be true?
Marvin Grey has a wide span of control.
Which of the following real-world scenarios best exemplifies formalization?
McDonald's use of standard operating procedures across the world
Which of the following is part of Geert Hofstede's cultural dimensions?
Power distance
For a firm pursuing a global-standardization strategy, which of the following bases of competition becomes its primary weapon?
Price
For a firm pursuing a global-standardization strategy, which of the following bases of competition becomes its primary weapon?
Price
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?
Principal-agent problem
PureSource Pharma Inc. recently acquired BioChem Pharmaceuticals Inc. It now sells its own products along with the products originally sold by BioChem Pharmaceuticals. As a result PureSource Pharma's sales force will also be marketing the acquired company's products. How will this horizontal integration most likely affect PureSource Pharma?
PureSource Pharma will lower its costs through economies of scale.
Evara Inc. started as a luxury brand for designer apparel. Soon the company expanded by launching its own line of premium perfumes watches bags and home furnishings. This expansion allowed the businesses under the company to share a few if not all of the common competencies in products services technology and distribution. Which of the following corporate strategies is Evara pursuing in this scenario?
Related-linked strategy
Georgia Ray is the founder of the departmental stores chain, Ether Inc. She ensures that the products in her stores are ethically and responsibly sourced. Most products are therefore 100 percent organic and manufactured from recycled material. Also, her company purchases handicrafts from non-profit organizations supporting the aged. Georgia's belief is that her company should be able to support the community at large. Which of the following terms best describes Georgia Ray?
Social entrepreneur
Which of the following real-world scenarios best exemplifies the use of organizational culture to build competitive advantage?
Southwest Airlines pilots sometimes help load baggage, which results in quick turnaround time.
How has China been affected by its one-child-per-family policy and appreciation of its currency?
The country's advantage in low-cost manufacturing has reduced.
Which of the following customer segments as described in the chasm framework make up the mass market?
The early and late majority together
Grace Apparel Inc. has decided to procure fabrics required for its garments from external suppliers instead of maintaining its own dyeing and weaving facilities. How will this decision affect the firm?
The firm will have more flexibility in purchasing and comparing prices of goods and services.
Which of the following is a competitive benefit experienced by the first mover firm in an industry?
The first mover will be able to reduce costs through economies of scale.
Which of the following is a competitive benefit experienced by the first mover firm in an industry?
The first mover will be able to reduce costs through economies of scale.
How does W.L. Gore exemplify founder imprinting?
The four core values articulated by Bill Gore guide the company and its associates to this day.
The compact disk (CD) industry is in the maturity phase of its industry life cycle. What conditions prevail for an industry in this stage?
The industry structure is an oligopoly with only a few large firms.
When Bill Smith buys WalMart stock on the NYSE he is exercising which of the following characteristics of corporate form?
Transferability of investor ownership
Why is it easier for new entrants to involve in radical innovations when compared to incumbent firms?
Unlike incumbent firms, new entrants do not have formal organizational structures and processes.
While cell phones with holographic keyboards are currently in the introduction stage of the industry life cycle, tablet computers are in the growth stage. In the context of this scenario, which of the following statements is true?
While the industry for cell phones with holographic keyboards will focus on product innovation, the tablet industry will focus on process innovation.
The Mansion Hotel Group purchased Red Brick Hotels for an estimated value of $120 billion. All the hotels previously owned by Red Brick Hotels are now managed by the Mansion Hotel Group and are known as Mansion hotels. What does this scenario best illustrate?
an acquisition
A firm pursuing a transnational strategy would believe that:
best practices, ideas, and innovations should be diffused throughout the world.
GM's insistence on sticking to a bureaucratic culture combined with its M-form structure and its subsequent failure to adapt to changing customer preferences for more fuel-efficient cars, produce higher quality, and create innovative designs best exemplifies ________.
core rigidity
The __________ states that geographic location alone should not lead to firm-level competitive advantage because firms are now, more than ever, able to source inputs globally.
death-of-distance hypothesis
As a research scholar, Richard had built a helicam as part of his project. The helicam could capture aerial images. Realizing the potential use of this product in movie production and military and rescue operations, he started a new venture where he could customize these helicams to fit the specific needs of the buyers and sell them. Richard can be best described as a(n) __________.
entrepreneur
According to Rothaermel managers can improve their ethical decision making by making sure that intended courses of action ____________ and ______________.
fall within acceptable norms of professional behavior; are comfortably defendable in public
Google the leader in online search and advertisement engaged in a number of smaller acquisitions of tech ventures. It did this in order to _____________
fill gaps in its competency lineup.
Google the leader in online search and advertisement, engaged in a number of smaller acquisitions of tech ventures. It did this in order to _____________
fill gaps in its competency lineup.
Olympia Autos Inc. merged with its competitor Vaca Autos Inc. This allowed Olympia Autos to use its technological competencies along with Vaca Autos' marketing capabilities to capture a larger market share than what the two entities individually held. What does this scenario best illustrate?
horizontal integration
Janet is on a subcommittee for the Board of Directors and they are chartered to develop a new expansion strategy. Samantha a senior level executive is concerned about recent productivity figures so she holds back some of the information at a recent Board meeting. This best represents an example of which of the following?
moral hazard
Norce Autos Inc. allows its customers, suppliers, researchers, and the community in general to contribute their ideas toward new product developments. Customers and other interested stakeholders can let the company know what new features they want to see in their next car. If the company faces any technical complexities that its internal R&D team cannot solve, it posts the problem on its website and allows people from the external community to provide solutions. In this scenario, Norce Autos Inc. is primarily leveraging its:
open innovation model
What causes the winner's curse?
overpaying for an acquisition
The core competency of Life Craft Inc. a pharmaceutical company is its drug-manufacturing technology used in producing insulin metformin and other drugs that help in keeping diabetes under control. Its target market consists of patients suffering from diabetes. Life Craft uses its existing drug-manufacturing technology to manufacture supplements that prevent diabetes. With its new product which is the first of its kind in the market the company targets a new market comprising people who do not have diabetes. In this scenario Life Craft is:
redeploying and recombining existing core competencies to compete in future markets.
While working a night job at a call center, Neville creates an app called FastServe, which can be used to place orders at restaurants, rate the restaurants, and make reservations. Because he receives good responses for his app, he quits his current job to focus his efforts on FastServe. He creates a startup called TYOP and hires three people to help him improve FastServe and maintain the servers that run it. In this scenario, TYOP most likely has a _______ structure.
simple
Which of the following reasons motivated Facebook to acquire Instagram a photo and video-sharing social media site for $1 billion in 2012?
the desire to gain a new capability
It is necessary for government authorities such as the Federal Trade Commission (FTC) and/or the European Commission to approve any large horizontal integration activity because ___________
the horizontal integration activity has the potential to reduce competitive intensity in an industry.
Divina Pharma Inc. and MF Electronics Inc. have together invested and created a new organization FirstHealth Inc. to focus on developing diagnostic devices. Through this new firm both companies are attempting to combine their core competencies to innovate and reduce their risks associated with transaction-specific investments. However
the new organization operates independently of Divina Pharma and MF Electronics. Which of the following alternatives to integration does this scenario best illustrate?, A joint venture
Organizational design is:
the process of creating, implementing, and modifying the structure of an organization.
The success of the Pixar-Disney strategic alliance demonstrated that ___________
the two entities' complementary assets matched.
A company that is using extrinsic motivation as an output control mechanism will most likely:
threaten to lay off employees if they do not achieve targets.
When does a merger between companies typically occur?
when two firms of comparable size join to form a combined entity
