BUS 498 QUIZ 1-6

A consolidated industry turns into a fragmented industry when A. restrictive government policies are introduced in the industry. B. firms reduce competition within the industry through mergers and acquisitions. C. technological advances lead to industry convergence. D. network effects enjoyed by incumbent firms within the industry become stronger.

A

A good strategy should be able to provide products and services to customers at an attractive price point while maintaining internal costs, resulting in A. Value Creation B. shareholder appreciation. C. competitive benchmarking. D. sustainable competitive advantage.

A

According to the resource-based view, a firm's competitive advantage often stems from its ___________ opposed to its ___________. A. intangible resources; tangible resources B. tangible resources; intangible resources C. current assets; long-term assets D. long-term assets; current assets

A

An organization's ________ describes what the organization actually does—the products and services it plans to provide, and the markets in which it will compete. A. mission B. vision C. promissory note D. code of conduct

A

Delish Corp is a chain of supermarkets that sells its fruits and vegetables at higher prices than its competitors. Yet, the supermarket chain has a large customer base due to its wide product portfolio and superior customer service. Which of the following generic business strategies has Delish Corp adopted in this scenario? A. Delish Corp is probably pursuing a differentiation strategy.Correct B. Delish Corp is probably pursuing a cost-leadership strategy. C. Delish Corp is probably pursuing a market penetration strategy. D. Delish Corp is probably pursuing a growth strategy.

A

For a firm to sustain its competitive advantage, any fit between its internal strengths and the external environment must be A. dynamic B. static. C. valuable D. permanent.

A

If costs are equal, when a firm has a higher value gap than its competitor, it can be inferred that the firm A. can charge a premium price for its products and services. B. has achieved a competitive parity in its chosen industry. C. has lost its competitive advantage to its competitor. D. can adopt a cost-leadership strategy.

A

Let's Roll Inc. and Ride 4 Ever Cycles Inc. are two competing motorcycle companies. While Let's Roll's Cost of goods sold/Revenue is 63.4 percent, the Cost of goods sold/Revenue of Ride 4 Ever Cycles is 54.2 percent. What do you infer from this financial data? A. Let's Roll is less efficient than Ride 4 Ever Cycles in producing goods. B. Let's Roll has a higher profit margin than Ride 4 Ever Cycles. C. Let's Roll and Ride 4 Ever Cycles have achieved a competitive parity. D. Let's Roll is able to command a greater price premium for its products than Ride 4 Ever Cycles.

A

Measuring how a customer views a firm under the balanced scorecard framework is important because A. customer perspective is directly linked to a firm's revenue and profit. B. the customer perspective reveals how rivals operate in the same industry. C. garnering customer feedback signals their importance to the company. D. knowing how customers view us can help us predict when an economic recession is coming.

A

Organizational core values are the answer to which of the following questions? A. What commitments do we make to act both legally and ethically? B. Which of the value chain activities are primary? C. What is the value added to a good or service at each step in the production? D. What is the company's customer lifetime value?

A

Which of the following SWOT factors are internal to the firm? A. strengths and weaknesses B. weaknesses and opportunities C. opportunities and threats D. threats and strengths

A

Which of the following is a stakeholder attribute that managers should consider at every step in a stakeholder impact analysis? A. legitimacy B. supremacy C. literacy D. solvency

A

Which of the following is not one of the VRIO characteristics of competitive advantage? A. variable B. rare C. costly to imitate D. organized to capture value

A

Which of the following questions would a firm's business strategy ideally answer? A. How should we compete? B. Where should we compete? C. Why should we compete? D. How should we implement the functional strategy?

A

Which of the following statements is true of the Level-5 leadership pyramid? A. Each level of leadership builds upon the previous one in the pyramid. B. Successful companies are led by Level-1 executives. C. At Level 3, managers are capable of devising a vision and mission to guide the firm toward superior performance. D. Once a manager moves to higher levels, he or she loses the qualities acquired in the previous levels to gain new ones.

A

William estimated that a pair of Perfect Fit jeans would be worth $60 for its brand and durability. However, at the Perfect Fit store, the pair of jeans he wanted was available for $45. The difference of $15 in this scenario is referred to as the A. consumer surplus. B. reservation price. C. producer surplus. D. break-even price.

A

________ tends to be more fierce when exit barriers in the industry are high, resulting in some firms being locked into the industry. A. Competitive rivalry B. Strategic complements C. Co-opetition D. Strategic Commitments

A

Hit Me Up is an instant messaging mobile application. Users have access to a basic version with limited message recipients for free, but they have to pay a fee to have unlimited message recipients or to use advanced features. Which of the following business models does this best illustrate? A. subscription-based B. freemium C. pay-as-you-go D. razor-razor-blade

B

In the context of SWOT analysis, a firm can develop a defensive strategic option primarily bY A. maximizing an external strength to exploit an internal opportunity. B. eliminating an internal weakness to mitigate an external threat. C. leveraging an external opportunity to overcome an internal threat. D. using an internal strength to exploit an external opportunity.

B

In the restaurant industry, a large number of restaurants cater to similar customer needs. However, each restaurant makes its product unique by offering a different cuisine, a different ambience, organic ingredients, or different services like home delivery. This differentiation allows each restaurant to set its own prices. Thus, the restaurant industry best illustrates a(n) A. perfectly competitive structure. B. monopolistically competitive structure. C. monogopoly. D. oligopoly

B

In which of the following cases was a company at a major competitive disadvantage? a. Facebook hired Sheryl Sandberg because Mark Zuckerberg, Facebook's founder, lacked important business skills. b. Without a clear strategic position, Sears tried to be too many things for too many types of customers. c. Sam's Club decided to prescreen its customers via required membership to establish creditworthiness. d. Strategy executives at UPS used scenario planning to identify issues critical to shaping the firm's future.

B

The greater the difference between value creation and cost, the A. less likely a firm will gain competitive advantage. B. greater a firm's economic contribution. C. greater a firm's competitive parity. D. less likely that a firm's strategic position will be competitive.

B

The metaphor of a black swan best applies to A. small businesses that become successful enough to raise capital through initial public offering. B. events that are considered highly unexpected and highly impactful when they do occur. C. highly profitable business units in low growth markets that are to be sustained solely for revenue generation. D. low profitable strategic business units within a large enterprise that are best divested or liquidated.

B

The relative bargaining power of suppliers is most likely low when A. the suppliers provide products that are differentiated. B. incumbent firms face low switching costs when changing suppliers. C. there are no readily available substitutes for the products and services they offer. D. the suppliers' industry is more concentrated than the industry it sells to.

B

There exist important trade-offs between value creation and low cost because value creation and cost tend to be A. negatively correlated. B. positively correlated. C. independent of each other. D.inversely related.

B

Too Fast Inc., a motorcycle company, is the market leader due to its superior engine technology and service orientation. These unique qualities have helped the company generate revenues that are consistently higher than other firms in the same industry. Which of the following can be concluded about Too Fast Inc. from this scenario? a. It has a direct investment in the other firms. b. It has a competitive advantage over the other firms. c.It has an exchange relationship with the other firms. d. It has competitive parity with the other firms.

B

When an organization briefly describes what they do and how they do it, they have more than likely articulated their A. values statement. B. mission statement. C. strategic plan. D. strategic intent.

B

Which of the following is a feature of a fragmented industry? A. It tends to generate high profitability. B. It consists of many small firms. C. It allows firms to set prices. D. One large firm dominates the industry.

B

A firm is likely to have a competitive advantage when it A. performs at a level similar to the other firms in the industry. B.provides goods similar to those of its competitors, but at a higher price. C. provides services that consumers will value more than those of its rivals. D. minimizes the difference between value creation and the costs involved.

C

According to the Level-5 leadership pyramid, the Level 2 manager is a(n) A. strategic leader. B. competent manager. C. contributing team member. D. effective leader.

C

An experience curve attempts to capture both A. network effects and diseconomies of scale. B. time compression diseconomies and mass customizations. C. learning effects and process improvements.Correct D. economies of scope and network effects.

C

Firms pursuing a cost-leadership strategy seek to A. create higher value for customers and offer premium pricing. B. keep their cost structures at the same or similar levels as that of the competitors. C. deliver products or services at a lower cost than competitors. D. gain competitive advantage by reducing the value gap.

C

Fones Inc. and Speed Dial Corp. are two competitors in the mobile phone market. The cost incurred by each company to manufacture smartphones is $200 per unit. Although both the companies sell their smartphones at the same price, Speed Dial Corp. has a larger market share in the smartphone industry. What does this imply? A. Speed Dial Corp. has a cost advantage over Fones Inc. B. Fones Inc. has a competitive advantage over Speed Dial Corp. C. Speed Dial Corp. has been able to offer more perceived value than Fones Inc. D. Fones Inc. has created a higher value gap than Speed Dial Corp.

C

In a focused differentiation strategy, a firm seeks to A. offer low-priced products and services with a narrow focus on a niche market. B. create higher customer value than the competitors in different segments of a mass market. C. deliver products or services with unique features to a specific, narrow part of the market. D. focus on reducing the value gap to differentiate itself from the competitors.

C

In the dynamic capabilities perspective, for an asset or a capability to be included in a firm's resource stock, it should be A. readily available for purchase using cash. B. commonly shared by other firms in the same industry. C. built through investments over time. D. capable of reducing the barriers to entry in an industry.

C

The _______ describes the internal activities a firm engages in when transforming inputs into outputs. A. resource-based view B. PESTEL analysis C. value chain view D. SWOT analysis

C

The sum of consumer surplus and producer surplus for a good or service equals the A. reservation price. B. firm's profit. C. economic value created. D. total return to shareholders.

C

When using the balanced scorecard approach to assess a firm's performance, which of the following is not a key question that managers need to answer? A. How do customers view us? B. How do we create value? C. What intangible assets do we need? D. How do shareholders view us?

C

Which of the following statements about competitive advantage is not true? a. A firm will have a sustainable competitive advantage when it outperforms its competitors over a prolonged period of time. b. A firm can gain a competitive advantage by providing goods similar to its competitors' goods at a lower price. c. A firm's competitive advantage is always absolute, not relative. d. A firm's past performance does not guarantee its future performance.

C

While SMART Tech Inc. incurs $350 to manufacture a laptop, its competitor, Better Electronics Inc., incurs $300. However, laptops of both the companies have been able to create the same value among customers. From the given scenario, it can be inferred that A. SMART Tech has a competitive advantage over Better Electronics. B. SMART Tech is a cost leader when compared to Better Electronics. C. Better Electronics and SMART Tech share a differentiation parity. D. Better Electronics can charge a higher price for its laptops

C

________ is an important tool because it allows a manager to recognize, prioritize and address the needs of various stakeholders. a. Stockholder appreciation b. Shareholder voting proxies c. Stakeholder impact analysis d. Shareholder Right's Plan

C

________ is best described as executives' use of power and influence to direct the activities of others when pursuing organizational competitive advantage. A. Intrapreneurship B. Venture capitalism C. Strategic leadership D. Machiavellianism

C

A firm's _______ are best described as distinct and fine-grained business processes such as order taking, physical delivery of products, or invoicing customers. A. resource flows B. capital gains C. capabilities D. activities

D

A firm's ________ strategy is likely to fall by the wayside because of unpredictable events and turn into unrealized strategy. A. recognized B. realized C. dominant D. intended

D

All of the following are examples of internal stakeholders except. A. employees. B. stockholders C. board members. D. suppliers

D

Even though Easy Speak Inc. and KM Com Inc. operate in the same industry—telecommunications—each firm has a different and loyal customer base. While Easy Speak Inc. attracts young students and professionals through its efficient network coverage and pricing, KM Com Inc. attracts elderly customers solely due to its excellent customer service. Thus, both firms draw their strengths from distinct resource bundles. Which of the following assumptions of the resource-based model of competitive advantage does this scenario best illustrate? A. resource imitation B. resource mobility C. resource substitution D. resource heterogeneity

D

Generally speaking, which of these situations is likely to lead to greater profits? A. an industry that is about to undergo deregulation B. a situation that encourages operating at excess capacity C. a fragmented industry rather than a consolidated one D. an industry with fewer but larger competitors

D

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

D

Incumbent firms can benefit from several important sources of entry barriers. Economies of scale are one such source. Which of the following is an implication of economies of scale for incumbent firms? A. They cannot employ technology efficiently. B. They can spread fixed costs over lesser units. C. They benefit from a less specialized division of labor. D. They can demand better terms from their suppliers.

D

Let's Talk Corp. is a public company whose shares are currently trading in the market at $150 each. The company manufactures smartphones at the cost of $300 per unit and sells them in the market for $500 each. What is the company's producer surplus? A. 150 B. 300 C. 650 D. 200

D

Owners of coffee plantations in the country of Cantonica grow their own coffee beans and supply them to various stores and restaurants all over the country. There are many plantation owners supplying to a huge number of companies, and they are typically unable to differentiate their products from one another. They also do not have the power to fix their own prices in the industry. In addition, these suppliers can only achieve competitive parity and not a competitive advantage. Thus, the coffee bean industry in Cantonica best illustrates a(n) ________ structure. A. monopolistically competitive B. oligopolistic C. monopolistic D. perfectly competitive

D

Restrictions imposed by the government, such as export quotas on certain products, are a part of the ________ environment of the PESTEL framework. A. economic B. sociocultural C. ecological D. political

D

The idea that all available information about a firm's past, current state, and expected future performance is embedded in the market price of the firm's stock is called the A. time compression economies. B. upper-echelons theory. C, price-demand function. D. efficient-market hypothesis.

D

The two primary competitive levers that managers can use in order to answer the question of how to compete are A. accounting profitability and shareholder returns. B. profit and loss. C. core competencies and competitive advantage. D. value and cost.

D

When a blue ocean strategy is successfully formulated and implemented, investments in differentiation and low costs are not A. value drivers but cost drivers. B. cost drivers but value drivers. C. complements but substitutes. D. substitutes but complements.

D

When asked to explore the strengths and weaknesses of a firm, which of the following would be the best framework to employ? A. Value Chain analysis B. PESTEL analysis C. Five Forces analysis D. None of these answers are correct.

D

Which of the following is a disadvantage of the balanced scorecard approach to measure firm performance? A. It fails to allow managers and executives to find a balance between financial and strategic goals. B.It only relies on an internal view of the firm, ignoring the external view. C. It fails to allow managers to align their different perspectives to create a more focused corporation overall. D. It provides only limited guidance about which performance metrics to choose.

D

Which of the following statements best supports the fact that even during a period of low demand in the U.S. automotive industry, excess capacity remained? A. Suppliers in the automotive industry had low bargaining power. B. Other American automakers of plug-in hybrid sports cars, like Fisker Automotive, filed for bankruptcy. C. Complementary products and services like battery charging and service stations were pervasive. D. GM and Chrysler, despite their bankruptcy, restructured instead of exiting the industry.

D

Which of the following statements does the upper-echelons theory support? A. Organizational outcomes including strategic choices and performance levels reflect the values of external stakeholders. B. The leadership actions of executives are independent of their characteristics like age, education, and career experiences. C. Strong leadership is solely the result of innate abilities and not learning. D. Executives interpret situations through the lens of their unique perspectives, shaped by personal circumstances, values, and experiences.

D

Which of the following statements is true of strategy? A. Statements of desire, on their own, are strategy. B. Tactical tools that are a part of a firm's functional and global initiatives are strategy. C. Operational effectiveness and competitive benchmarking are strategy. D. Actions that allow a firm to address a competitive challenge are strategy.

D