ch 1 - 5
Customer responsiveness includes which of the following? A. Identifying and satisfying customer needs B. Improving the quality of a company's products C. The willingness to customize products for customers D. Superior product design E. All of these choices
e
A company may find it difficult to change capabilities because of A. embedded power and influence. B. turf battles. C. power struggles and political resistance. D. A and B. E. all of these choices.
e
A company's strategic commitments A. allow it to imitate a competitor's advantage rapidly. B. are a way to avoid failure. C. occur when an organization is profitable. D. reduce inertia. E. allow it to develop a particular set of resources and capabilities.
e
Factors that help a company to build and sustain competitive advantage include which of the following? A. Superior efficiency B. Product quality C. Innovation D. Customer responsiveness E. All of these choices
e
Companies in the same industry may have A. different competitive competencies. B. similar distinctive competencies. C. easily imitated distinctive competencies. D. hard-to-imitate distinctive competencies. E. all of these choices
e
Cost accountants are responsible for gathering and monitoring data used for controlling the organization's costs. Cost accountants work in which value chain activity? A. Research and development B. Human resources C. Materials management D. Marketing and sales E. Company infrastructure
e
Six Sigma is a quality and efficiency program derived from the concept of Total Quality Management, and was widely used in Japan before acceptance in the U.S.
t
Taken together, factors such as existing strategic commitments and low absorptive capacity limit the ability of established competitors to imitate the competitive advantage of a rival.
t
The Icarus paradox suggests that those factors that led to a company's success may ultimately lead to their failure.
t
The Six Sigma name refers to the Greek letter meaning standard deviation from the mean.
t
The importance of reliability in building competitive advantage has increased dramatically over the past decade.
t
The more a resource is firm-specific and difficult to imitate, the more likely a company holding that resource is said to have a distinctive competency.
t
The more utility a company creates for its customers, the more flexibility it has in determining prices.
t
The most successful firms are those that constantly learn and upgrade their distinctive competencies.
t
Together with an analysis of the company's external environment, internal analysis gives managers the information they need to choose the business model and strategies that will enable their company to attain a sustained competitive advantage.
t
Top management should take primary responsibility for establishing measures of quality.
t
Toyota's lean production system is the basis of its competitive advantage.
t
Walmart pursues a low cost operator policy.
t
No matter how complex the task is, learning effects typically die out after a limited period of time.
t
A company's competitive advantage will not endure for long when that competitive advantage can be A. quickly or easily duplicated by other companies. B. protected by patents. C. protected by significant barriers to imitation. D. shared with other companies in the industry. E. shielded by copyrights.
a
At the most basic level, a business is simply a device for A. transforming inputs into outputs. B. transporting products from one location to another. C. converting outputs into inputs. D. transferring title to goods from one party to another. E. conserving outputs.
a
Competitive advantage is based on A. distinctive competencies. B. economic forces external to a company. C. lack of government regulations controlling a firm's ability to make rapid adjustments in response to its changing environment. D. all of these choices E. none of these choices.
a
Dale's horseshoeing methods save time and money for his employer, but when Dale suggests that everyone use his method, his boss says, "No. That's not the way we've always done it around here." Dale's employer is suffering from A. organizational inertia. B. prior strategic commitments. C. barriers to mobility. D. lack of distinctive competencies. E. the Icarus paradox.
a
Donna can make a chair for about $100, she charges customers $150 to buy the chair, and customers perceive that the chair is worth $225. Donna's profit margin is A. $50. B. $75. C. $100. D. $150. E. $225.
a
One of the most widely used measures of financial performance is A. return on invested capital. B. net profit margin. C. share value. D. net sales. E. productivity.
a
Strong leadership from top management is A. a support activity. B. needed to attain economies of scale. C. needed to build brand loyalty. D. part of the human resources value chain activity. E. a primary activity in the value chain.
a
The concept of quality applies to A. all products. B. the products consumers believe to be high-quality products. C. products with a high per-unit cost. D. custom-made products only. E. only those products that have been redesigned.
a
Using the value chain model, which of the following primary activities is performed first, as inputs are transformed into outputs? A. Research and development B. Marketing and sales C. Human resources D. Production E. After-sales service and support
a
When companies find it hard to change their strategies and structures to adapt to changing competitive conditions, they suffer from A. inertia. B. prior strategic commitments. C. barriers to mobility. D. lack of resources. E. lack of capabilities.
a
Which of the following distinctive competencies typically has the lowest barrier to imitation? A. Efficient scale manufacturing facilities B. Technological know-how C. Marketing know-how D. Organizational capabilities E. Brand name
a
Which primary activity in the value chain is concerned with the design of products and production processes? A. Research and development B. Marketing and sales C. Materials management D. Production E. Company infrastructure
a
____ is a way to avoid failure. A. Benchmarking B. Gaining access to resources C. Ignoring prior strategic commitments D. Avoiding organizational commitments E. The Icarus paradox
a
Donna can make a chair for about $100, she charges customers $150 to buy the chair, and customers perceive that the chair is worth $225. In this case, the consumer surplus is A. $50. B. $75. C. $100. D. $150. E. $225.
b
Efficiency is A. defined as the time it takes to produce a product. B. defined as the cost of inputs required to produce a given output. C. pursued only by cost leaders. D. measured by looking at a product's price. E. lower when the output is high-quality.
b
Innovation refers to the act of A. seeking patent protection for new products. B. creating new products and processes. C. repackaging current products to make them more appealing to consumers. D. all of the above. E. none of the above.
b
Mike works as a corporate trainer, teaching new employees how to perform manufacturing tasks. Mike works in which value chain activity? A. Research and development B. Human resources C. Materials management D. Production E. Company infrastructure
b
Resources A. are the tangible assets available to a company. B. can be tangible or intangible. C. are harder for a company to copy than capabilities are. D. are the products of a company's control systems. E. refer to an organization's skills.
b
The Icarus paradox can be overcome if a company A. achieves superior innovation. B. balances its pursuit of distinctive competencies. C. develops its marketing expertise. D. pursues a growth strategy. E. achieves superior quality at a low cost.
b
When Rollie's car wash began to lose business to rivals, Rollie read publications for car wash owners to learn the best practices in the industry. Then she implemented the best practices. Rollie is using ____ to improve her car wash. A. specialized assets B. benchmarking C. strategic commitments D. inertia E. the Icarus paradox
b
Which of the following factors does not determine the durability of a company's competitive advantage? A. Barriers to imitation B. A company's prior strategic commitments C. Capability of competitors D. General level of dynamism in the industry E. The rate of product innovation in an industry
b
One of Otis Elevator's strengths is the ability to continue to improve employee productivity.
t
A company's competitive advantage is more durable when A. barriers to imitation are low and there are few capable competitors. B. barriers to imitation are high and there are many capable competitors. C. barriers to imitation are high. D. the industry is stable and there are many capable competitors. E. the industry is stable and barriers to imitation are low.
c
Capabilities are defined as a company's A. physical plant and equipment. B. technological know-how. C. skills at coordinating resources and putting them to productive use. D. reputation. E. resources.
c
Capabilities refer to a company's A. tangible resources. B. intangible resources. C. skills at coordinating its resources and putting them to productive use. D. strategy as expressed in the firm's business model. E. policies.
c
Competitive advantage typically leads to A. an effective business model. B. average profitability within an industry. C. superior profitability. D. making procedures routine. E. flexibility in manufacturing.
c
Industry dynamism refers to A. the gradual erosion of a company's customer base over time. B. shifts in product profitability. C. a rapidly changing industry environment. D. increasing per-unit costs. E. none of these choices.
c
Kim's T-shirt factory was expert at providing unique, high-quality, but costly to make shirts. Even though the designs were very nice and the amount of detail increased over time, the high price meant that few customers bought shirts from her and her factory went bankrupt. Kim's factory failed due to A. inertia. B. prior strategic commitments. C. the Icarus paradox. D. lack of distinctive competencies. E. lack of capabilities.
c
The Icarus paradox suggests that A. companies should stick to a narrowly defined line of products. B. better-than-average profitability is an elusive goal. C. companies may become so dazzled by their early success that they believe more of the same kind of effort will assure future success. D. companies often pursue too many strategies at once. E. companies should change strategies before strategies need changing.
c
The term value chain refers to the idea that a company is A. one of a series of companies that comprise an industry segment. B. the producer of a series of products that are linked together. C. a chain of activities for transforming inputs into outputs that customers value. D. one of a series of economic functions. E. all of the above.
c
Using the value chain model, which of the following primary activities is performed last, as inputs are transformed into outputs? A. Research and development B. Marketing and sales C. After-sales service and support D. Production E. Human resources
c
Which of the follow support activities in the value chain refers to the companywide context within which all the other value creation activities take place? A. Human resources B. Information systems C. Company infrastructure D. Materials management E. Operations
c
A company may fail for which of the following reasons? A. The company loses its competitive advantage. B. The company's profitability declines. C. The company neglects to change strategies and structures. D. All of these choices E. None of these choices
d
A product can be thought of as a(n) A. package of possibilities. B. configuration of parts. C. one-time purchase. D. package of attributes. E. series of alternatives.
d
According to a number of scholars, what role does luck play in determining competitive success and failure? A. No role at all B. A very small role C. It produces sustained excellence. D. A critical role E. None of these choices
d
Cost of goods sold is determined by examining which of the following? A. The balance sheet B. Sources and uses of the financial statement C. The cash budget D. The income statement E. The overhead and administrative expense statement
d
Ford Motors developed the Explorer sports utility vehicle, the number 1 selling sports utility vehicle in the United States, based on an extensive study of customer preferences. Which value chain activity of Ford conducted those studies? A. Research and development B. Human resources C. Materials management D. Marketing and sales E. Company infrastructure
d
____ can help an organization overcome inertia. A. Power struggles B. Capabilities C. Prior strategic commitments D. A crisis E. The Icarus paradox
d
How profitable a company is ultimately depends on A. management's evaluation of the utility of a product. B. product utility created through advertising. C. the value of the patents the company holds. D. the image of the company's products in the marketplace. E. the value customers place on the company's products.
e
Research and development activities are concerned with A. product design. B. production processes. C. service activities as well as manufacturing activities. D. intangible as well as physical products. E. all of these choices.
e
The four basic building blocks of competitive advantage are A. low cost, quality, efficiency, and customer responsiveness. B. differentiation, quality, innovation, and customer responsiveness. C. quality, efficiency, differentiation, and customer responsiveness. D. customer responsiveness, quality, efficiency, and human resources. E. quality, customer responsiveness, innovation, and efficiency.
e
The intellectual property of an organization is a(n) A. tangible resource. B. tangible competence. C. tangible capability. D. intangible capability. E. intangible resource.
e
When a firm produces products that customers perceive as having higher utility than those of its rivals, this firm's source of competitive advantage is A. design. B. low innovation. C. superior quality. D. efficiency. E. customer responsiveness.
e
Which of the following is not a way that companies can avoid failure? A. Benchmarking B. Continuous learning C. Developing distinctive competencies D. Exploiting luck E. Investing in specialized assets
e
Which of the following is not true regarding a company's distinctive competencies? A. They represent the unique strengths of the company. B. They refer to company strengths that competitors cannot easily match or imitate. C. They form the bedrock of a company's strategy. D. They can be based in any of the value creation functions of the company. E. They are shared by many firms in an industry.
e
According to Rose Marie Bravo of Burberry, creative ideas may come from a number of sources, except from the accounting department.
f
Brad has developed a new, improved irrigation procedure for use in his apple orchard. Brad is creating a product innovation.
f
Functional strategies, because they occur at a low level in the firm, play only a small role in organizational success.
f
Harvard Business School found no differences in learning effects among hospitals performing a new cardiac procedure.
f
Learning effects tend to be more significant when a technologically complex task is performed only occasionally.
f
Patents typically provide the greatest barrier to imitation.
f
Quality as excellence and quality as reliability are concepts that applied to goods but not services.
f
Quantum innovation refers to an extension of existing technology.
f
Resources are tangible; there is no such thing as intangible resources.
f
The building blocks of competitive advantage are efficiency, quality, innovation, and profitability.
f
The challenge for a company's human resource function is to find ways to lower wage and benefits costs.
f
The law of economies of scale suggests that unit costs continue to fall indefinitely as output volume increases.
f
The most important source of McDonald's low cost structure is the high quality of its products.
f
The price a company charges for a good or service is typically more than the utility placed on that good or service by the customer.
f
There is a negative relationship between the length of time that a customer stays with a company and profit per customer.
f
When a company has differentiated products, they have less pricing options.
f
While Information Systems (IS) have greatly improved externally focused decision making, they have had little impact on lowering costs.
f
A benefit of long-time customer loyalty is the free advertising that customers provide for a company through referrals.
t
A rapid response time is one of the key factors that enables the fashion house Zara to quickly address changes in the fashion industry.
t
A value chain is a sequence of activities for transforming inputs into outputs that are valued by customers.
t
Absorptive capacity refers to the ability of an enterprise to identify, value, assimilate, and use new knowledge.
t
All else being equal, if a company moves down the experience curve faster than its rivals, it should realize a lower cost structure.
t
At Adam's bicycle shop, the primary value chain activity of production occurs each time a customer's bicycle is repaired.
t
At the heart of any company's business model is the combination of congruent strategies aimed at creating distinctive competencies that differentiate its products and result in a lower cost structure.
t
Benchmarking is a practice in which a company's performance is compared against that of competitors and the historic performance of the company itself.
t
Diseconomies of scale are the unit cost increases associated with a large scale of output.
t
Distinctive competencies are firm-specific strengths that allow a company to differentiate its products and/or achieve substantially lower costs than its rivals.
t
Distinctive competencies shape the functional-level strategies that a company can pursue.
t
Employee productivity is a common measure of efficiency.
t
Flexible manufacturing technologies enable companies to produce small batches of high-quality customized products at a cost that, at one time, could be achieved only through mass production.
t
IBM's investment in mainframe computers is an example of a prior strategic commitment.
t
If a company's profitability is higher than the industry average, it has a competitive advantage.
t
Imitating a company's capabilities tends to be more difficult than imitating its tangible and intangible resources.
t
Internal analysis is concerned with identifying a company's strengths and weaknesses.
t
Mass customization describes the ability of companies to use flexible manufacturing technology to reconcile the two goals of low cost and differentiation through product customization.
t
Materials management encompasses the activities necessary to get inputs and components to a production facility, through the production process, and out through a distribution system to the end user.
t
