Business Policy Ch1-4 Quizzes
A firm will fail to create a sustained competitive advantage when theA) fit between its internal strengths and the external environment is static.B) source of its competitive advantage is causally ambiguous.C) source of its competitive advantage is socially complex.D) resource bundles exhibit heterogeneity and immobility.
a
Andrew is a management consultant. Hard Supplies Inc. asks him to evaluate theircompany, and he finds that the difference between the cost of producing the firm's products andthe value of those products is extremely narrow. What should Andrew suggest that HardSupplies Inc. management do?A) Find a way to widen the gap between cost and value.B) Find a way to pass on as much profit as possible to suppliers and customers.C) Shore up the company's strong position by erecting entry barriers.D) Encourage customers to buy complements to their products
a
Bill Lewis wants to become a business strategy consultant and doesn't understand how emerging consultants get started. Bill should familiarize himself with the ________ framework that outlines the important process when examining the concept of strategic management.A) AFI: Analyze-Formulate-ImplementB) AFE: Analyze-Formulate-ExecuteC) API: Analyze-Plan-ImplementD) APE: Analyze-Plan-Execute
a
Jennifer was just named the CEO of a pen company called National Pens Inc. Sheimmediately changed the name to "Jenn's Pens." When asked why she made this change by theboard of directors, who showed research that there was no correlation between success and CEPnames, she responded by saying, "my previous company had the name of their CEO in the title,and they were very successful." This fallacy on Jenifer's part reveals herA) confirmation bias.B) optimal decision making.C) escalation of commitment.D) groupthink.
a
Samsung and Google cooperate as complementors to compete against Apple's strong position in the mobile device industry, while at the same time Samsung and Google are increasingly becoming competitive with one another. This scenario best illustrates the process ofA) co-opetition.B) perfect competition.C) monopolization.D) conglomeration.
a
Suger & Sweet Sodas has seen its market share erode in recent years, as consumersincreasingly turn toward healthier beverage choices such as unsweetened sparkling water.Hoping to rekindle interest in sugary sodas, Suger & Sweet decides to produce a limited run of"throwback" cans using labeling first introduced in the 1980s. What is wrong with this strategy?A) It fails to face the competitive challenge.B) It does not involve concrete actions.C) It lacks strategic commitments.D) It tries to be everything to everybody
a
TalkaLot Inc. is a cell phone manufacturing company. Its latest range of smartphones are visually similar to the Y-series range of smartphones from Talkie Gen Inc., in terms of its shape and look-and-feel. Which of the following strategies has TalkaLot Inc. used to replicate the valuable and rare resource of Talkie Gen Inc.?A) direct imitationB) strategic equivalenceC) substitutionD) innovation
a
The CEO of All Star Corp. has decided to enter the markets of emerging nations likeChina and Brazil. This means that the books, magazines, and websites published under theChyron Media banner would be made available in these nations. Which of the followingstrategies does this scenario best illustrate?A) corporate strategyB) functional strategyC) business strategyD) divisional strategy
a
The ___________________ suggest(s) that because the external environment changes, strategic leaders must choose their current and future investments carefully over time in order to best maintain their firm's competitive advantage.A) dynamic capabilities perspectiveB) VRIO frameworkC) SWOT analysis frameworkD) law of diminishing returns
a
The distribution department at Wheat, Barley and Whey Corp. has decided to adopt theFIFO (first in, first out) method of inventory to dispatch its bags of wheat. Which of the following strategies does this scenario best illustrate?A) functional strategyB) corporate strategyC) master strategyD) business strategy
a
The minimum wage in the country of Hanns is $8 an hour. Delish, a restaurant in Hanns'capital city, pays its servers $8 per hour. However, the management of the restaurant feels thatthis amount is excessive for workers whose only job is to clear tables. By continuing to adhere tothe rules set by the government of Hanns, which of the following responsibilities is Delishsatisfying?A) legal responsibilitiesB) philanthropic responsibilitiesC) ethical responsibilitiesD) demographic responsibilities
a
Value chain analysis consists of systematically analyzing a firm's key activities that foranalysis purposes are categorized into two groups:A) primary activities and support activities.B) products and service activities.C) customers and suppliers.D) profits and losses
a
We Build & Build's' core competency is building multi-family housing in urban areas.This competency is based primarily on the decisions made by the company's top management over several years to focus on building in densely populated cities. Management used the process ofA) path dependence.B) dependence complexity.C) causal dependence.D) path immobility
a
WeBreak4Bikes Inc. has a new U.S.-based client in the bicycle industry. The client's company produces only bicycles for riding on the road. The bicycles are used for reliable general purpose transportation. When asked to identify a potential substitute for the bicycle industry from the Five Forces perspective, you would selectA) motorcycles.B) hot air balloons.C) tractors.D) None of these are substitutes
a
Which of the following below is NOT categorized as a primary activity on Porter's ValueChain?A) procurementB) operationsC) after sales serviceD) marketing and sales
a
Which of the following is an assumption that top-down strategic planning rests on?A) We can predict the future from the past.B) Time cannot be compressed at will.C) Decisions made in the past do not affect our future.D) Change is constant
a
Which of the following options below would serve as a feasible option when deciding how to enter an established industry?A) leverage existing assetsB) initiate a greenfield operationC) raise stakeholder capital by issuing stockD) only enter if it's an oligopoly
a
Which of the following statements is true of the social responsibilities of a business?A) A firm's ethical responsibilities go beyond its legal responsibilities.B) Shareholders mandatorily require a firm to perform its ethical and philanthropic responsibilities.C) Ethical responsibilities are the foundational building block of a firm's social responsibility.D) Legal responsibilities are often subsumed under the idea of corporate citizenship, reflecting the notion of voluntarily giving back to society
a
Which of the following tasks in the AFI strategy framework involves evaluating theinternal and external environments in which a firm operates?A) analysisB) formulationC) implementationD) competitive advantage
a
While implementing strategic group mapping for the U.S. domestic airline industry, two strategic groups become apparent: low-cost, point-to-point airlines (Virgin Atlantic, AlaskaAirlines, JetBlue, and Southwest Airlines) versus differentiated airlines using a hub-and-spoke system (American, Delta, and United). Which of the following statements is true about these two strategic groups? A) Competitive rivalry between Virgin Atlantic and JetBlue is likely to be higher thanthat between American and Southwest Airlines.B) American, United, and Delta Airlines will be affected differently by Porter's five competitive forces.C) Alaska Airlines and Delta Airlines will be affected by the external environment in very similar ways.D) Competitive rivalry between Virgin Atlantic and Delta Airlines is likely to be higher than that between American, Delta, and United.
a
________ are considered the ethical standards and norms that govern the behavior of individuals within a firm.A) Organizational core valuesB) Mission statementsC) Vision statementsD) Strategic leadership
a
Alan has been an employee with StartsInc. for 15 years. He started with an entry-level job, and today he is a manager of an entire division. Over the years, Alan has acquired a reputation for doing the right things in the company. Hence, as an efficient leader, he is capable of effectively communicating and motivating his subordinates to work toward the company's vision and mission. According to the Level-5 leadership pyramid, which is the highest level of leadership Alan has reached so far?A) Level 5B) Level 4C) Level 3D) Level 2
b
Food Shipp Inc. is a food supply company that wants to sell its products directly to consumers through mail order instead of going through supermarkets and other stores. However, supermarket chains want to make this transaction either illegal or more difficult for Food Shipp. To accomplish this, they are using ________ to influence the political process.A) ecological factorsB) lobbying forcesC) interest ratesD) demographic research
b
Good Ole Cinemas Inc. and HD Inc. are two companies that own and run movie theaters in malls and other commercial areas. While Good Ole Cinemas Inc. pursues a cost-leadership strategy, HD Inc. adopts a differentiation strategy. Which of the following statements is most likely true of this scenario?A) Good Ole Cinemas will charge a premium price for its customers, while HD will implement everyday low pricing.B) HD and Good Ole Cinemas will not be direct competitors to each other, and their customer segments will overlap very little.C) HD will keep its customer service at an acceptable level, while Good Ole Cinemas will provide superior customer service.D) Good Ole Cinemas and HD will use a similar approach to create value for customers by attempting to offer everything to everybody
b
Online retailer eBuy had been drastically losing market share to its competitors. The management hired a reputed consulting firm to advise the company. The experts from the consulting firm pointed out that the company primarily lost out on its competitive advantage due to its poor customer service, including slow response times to customer inquiries and unclear return policies. These ineffective policies and procedures led to many disgruntled customers and a steady migration to more customer-friendly retailers. eBuy can best solve its problem by working on itsA) immobile assets.B) support activities.C) resource flows.D) resource stocks
b
We Ensure Inc., an insurance firm, replaced its existing project management software with new software from another supplier. Since the new software has different features and abilities, We Ensure has had to spend $10,000 on training its employees to use it. In this scenario, $10,000 represents We Ensure'sA) opportunity cost.B) switching cost.C) octroi charge.D) excise duty
b
Bill's Auto & Airplane Repair shop is able to generate a positive net income of $10,000 a week; this is the industry average. We can conclude that since he has a positive net income, he also has a competitive parity in the industry A) competitive advantage is achieved through profitability alone. B) competitive advantage is achieved since Bill's Auto & Airplane Repair shop has a positive net income. C) competitive parity is achieved by generating average returns, relative to competition in a given industry. D) Bill's Auto & Airplane Repair shop more than likely has a sustained competitive advantage since his business is diversified
c
HomeAgain is a nonprofit organization that works toward rehabilitating the homeless.The credo of the organization is "help us help you." For an organization like HomeAgain, which of the following statements would make an appropriate mission?A) Help us help you find a home.B) One day, everyone in this nation will have a home to protect themselves.C) We help the homeless gain and sustain financial independence by providing employment opportunities.D) Our mission is to turn this not-for-profit organization into a for-profit organization so that the stakeholders benefit.
c
Industrial Drills, a company that manufactures industrial tools, incurs higher costs because of its refusal to outsource its manufacturing to countries where labor costs are lower.This reflects Industrial Drills' ________ responsibility.A) economicB) legalC) ethicalD) demographic
c
STRIKEBYTE Inc. is a software company that has built and acquired numerous assets over the years. According to the resource-based view of a firm, which of the following assets of STRIKEBYTE Inc. will best enable it to gain and sustain a competitive advantage?A) the cloud computing service that it usesB) the capital the company raised from its shareholdersC) the expertise acquired by the employees in the companyD) the headquarters building owned by the company
c
Which of the following applies to the Strength-Threats quadrant of the SWOT matrix? 44285 Fall 20236A) The local fast-food chain Easy Hot Dogs expanded its limited menu to maintain its advantage against stiff competition.B) The local fast-food chain Easy Hot Dogs added a salad bar to maintain its competitive advantage against stiff competition.C) The local fast-food chain Easy Hot Dogs used its wholesome image to maintain its competitive advantage against stiff competition.D) The local fast-food chain Easy Hot Dogs revised its image of being a cheap-food place to being a wholesome family place to maintain its competitive advantage against stiff competition.
c
Which of the following best qualifies as a firm's internal stakeholder?A) an auditor assigned to the firm by a federal government agencyB) a labor union with whom the firm's employees can affiliateC) a manager taking care of the firm's operations in a foreign marketD) a competitor manufacturing the same products as that of the firm
c
Which of the following fundamental insights was provided by Porter's five forces framework from the completion of the Alta Velocidad Española (AVE)?A) A strong threat of substitutes decreases the rivalry among existing competitors.B) All of the five forces must work together to have a meaningful impact.C) Any of the five forces on its own, if sufficiently strong, can extract industry profitability.D) Competition must be defined more narrowly to remain confined to the industry's closest competitors
c
Which of the following is a customer-oriented vision?A) to be the most progressive insurance companyB) to be the best automobile company in the worldC) to enable businesses to improve their employee communicationsD) to manufacture innovative products through continuous learning
c
9) Corporate executives at Fly High Inc. decide to compete in the remote model airplane industry by making the largest model planes available. By doing this, they completed part of their ________ strategy.A) implementationB) corporateC) functionalD) business
d
All of the following are external stakeholders except which of the followingA) customersB) creditorsC) alliance partnersD) competitors
d
Cartzy Inc., Cartific Inc., and Clustercart Inc., are three consumer-product retailingcompanies. Their products consist primarily of day-to-day items that are easy to imitate and sell.All three companies use the same resources and capabilities in the production and distribution oftheir products. Judging from the market conditions described in this scenario, which of thefollowing statements is true?A) Resource immobility of the firms will be low.B) The industry structure will be far from perfect competition.C) Barriers to entry within the industry will be high.D) Any advantage that one firm has will be short-lived.
d
Due to several black swan events in the past, theA) shareholders of public companies have become more confident in investing their resources in businesses.B) need for corporate governance and transparency has decreased within various industries.C) nations around the globe have explicitly appreciated and accepted capitalism as an economic system.D) implicit trust relationship between the corporate world and society at large has deteriorated
d
Hank runs a company that manufactures satellites for commercial and government use. Ithas few rivals. At the moment, the power of buyers, the power of suppliers, and the threat of substitutes are all low. Based on this information, what can Hank conclude?A) The manufacturer is likely to see little profit until the power of buyers improves.B) In this scenario, suppliers are likely to create and sell effective substitutes.C) This firm is an example of near-perfect competition.D) The company is likely to be very profitable as long as the threat to entry is low
d
If a company wants to gain a competitive advantage in a highly competitive industry, it should ideallyA) execute an integrated cost-leadership and differentiation position.B) copy the strategies of other firms through competitive benchmarking.C) provide goods or services similar to its competitors at higher prices.D) stake out a unique position within the industry.
d
In which of the following situations is a company that exists in the telecommunicationsindustry most likely to face the highest threat of entry?A) if the company is able to put up a credible threat of retaliationB) if the capital requirements in the industry are highC) if the customer switching costs in the industry are highD) if the industry has recently become deregulated
d
Managers at SunTrustUs Properties are surprised to hear that interest rates are likely to remain low for the next six months. Which of the following is an implication of low interest rates?A) Cost of capital for firms will be high.B) Firms will invest less in future growth.C) Economic growth rate will fall.D) Consumer demand will increase
d
The first step in stakeholder impact analysis involvesA) formulating a stakeholder strategy to balance the different needs of various stakeholders.B) identifying the opportunities and threats the stakeholders present.C) describing the economic, legal, ethical, and philanthropic responsibilities of the firm toward society.D) identifying the stakeholders that currently have, or potentially can have, a material effect on a company.
d
The management of Venture Manufacturing showed a commitment to ________ by increasing the salary of many female employees to meet its goal of having equal pay for women and men who perform comparable work.A) scenario planningB) upper-echelons theoryC) product-oriented visionD) organizational core values
d
The management of a company is assessing the value of all the tangible resources the company owns. Which of the following will be included in this assessment?A) a reputation for fast customer serviceB) a culture of proactive communicationC) patents for electronic componentsD) the punch presses that produce parts
d
Toyago Inc. is a leading educational toy company. Competitors across the globe have failed to imitate Toyago's production models, supply chain systems, knowledge systems, and culture. These attributes have remained unique to Toyago Inc. for a long time. Which of the following assumptions of the resource-based model of competitive advantage does this scenario best illustrate?A) resource homogeneityB) resource costC) resource substitutionD) resource immobility
d
Which of the following features about a buyer indicates that the buyer has high bargaining power?A) when the buyer cannot credibly threaten to backwardly integrate into the industryB) when the buyer cannot purchase specific products from other sellersC) when the buyer faces high switching costsD) when the buyer purchases inputs that are standardized or undifferentiated commodities
d
Who among the following is responsible for making business strategies in a largeconglomerate?A) the board of directors at the headquartersB) the shareholder of the companyC) the lower-level employees in the companyD) the general managers of individual business units
d
