Exam 1 Strategic MGT
A vision describes in broad, inspirational terms what an organization hopes to accomplish in the future.
True
An employee lacking some of the innate abilities to be a top-level manager can still become an effective strategic leader through hard work and experience.
True
A firm always has a competitive disadvantage when its return on invested capital is
below the industry average
The production head at the All Paints and Surface Corp. would frequently stay back after office hours and experiment with new color combinations even though it was part of the new product development team's job. As a result of these experiments, he came up with two new interior paint colors, foggy morning and mint julep. The new colors proved popular among test groups, and quickly became some of Omnitone's best-selling products. Which of the following strategies does this scenario best illustrate?
emergent strategy
As the legal owners, ________ have the most legitimate claim on a company's profits.
shareholders
Which of the following best describes a strategic tradeoff?
the tension between value creation and the pressure to keep costs in check
average cost of production for a bottle of vitamin water in the industry is $5 while its average price is $8. Facuet H20 Inc. manufactures the same product for $3 per bottle and sells it for $8 per bottle. Which of the following statements is most likely true of Faucet H20 Inc. in this scenario?
It has competitive advantage in the industry.
Jill is interested in the concept of strategy and decides to create her own. As a result, Jill says that her strategy is to focus on growth anf marketing to achieve competitive advantage. How would you evaluate Jill's statement?
Jill should reevaluate her statement because it fails to meet the principles of what a strategy should be.
Which of the following best describes a Level 5 manager in the Level-5 leadrship pyramid?
Jim is the CEO of Eco Inc.; he has helped his company in gaining and sustaining a competative advantage through ethical decision making.
A company that owns failing movie theaters could leverage existing. assests by turning the buildings into performace spaces and conference sites.
True
When smartphone manufacturers began including cameras and voice recorders in their products, that was an example of industry convergence.
True
Gr8t Food is a chain of "fast casual" restaurants that sells its menu items at higher prices than its competitors. The restaurant has a large customer base due to its wide product portfolio and superior customer service. Which of the following generic business strategies has Gr8t Food adopted in this scenario?
differentiation
Given the structure of the automobile industry, entering the auto manufacturing industry seemed risky. Yet Tesla Motors joined the fray. Rather than attempting to compete head-on with internal combustion engines, Tesla Motors entered the all-electric car segment, a much less crowded niche in the overall car industry. Which of the following is Tesla most hoping to benefit from in this market niche?
economies of scale
In the AFI strategy framework, strategy analysis primarily involves
evaluating the effects of internal resources and core competencies on a firm's potential to gain and sustain a competative advantage.
A value curve indicates a lack of effectiveness in a firm's strategic profile when it
zig-zags
When a firm manufactures 2,000-3,000 units of a product, it incurs an average cost of $10 per unit. When it manufactures 3,000-4,000 units of the same product, the average cost per unit reduces to $7. However, manufacturing beyond 4,000 units will raise the average cost per unit to $9. Which of the following is the firm's minimum efficient scale?
3,000-4,000 units
which of the following summarizes the difference between a firm's vision and mission?
A vision states what a firm wants to accomplish; a mission states how a firm plans to accomplish the vision.
Which of the following factors most contributes to the U.S. automotive industry being characterized by high entry barriers?
Car manufactures require large-scale production in order to be cost-competitive
Who among the following is responsible for making business strategies in a large conglomerate?
the general managers of individual business units
CooCoo Cola has successfully achieved a competative advantage in the soft drink industry as a differentiator. Which of the following scenarios would undermine CooCoo's position?
CooCoo's customers start to consoder soda as a commodity.
Which of the following describes an airline that is most likely stuck in the middle?
Eastern Airlines offers high-quality beverages and meals, plush airport lounges, only a few connections via hubs domestically, poor customer service, and low prices.
You are the manager in charge of setting the strategy for a new fast-causal restaurant. Which of the following questions would be appropriate for you to ask during the analysis phase of the AFI strategy framework?
How have consumer preferences in the fast-casual restaurant industry changed in the last five years?
In which of the following situations is a company that exists in the telecommunications industry most likely to face the highest threat of entry?
If the industry has recently become deregulated
Which of the following is a primary feature of the five forces model?
It views competition within an industry broadly to include such as buyers, suppliers, and the threat of substitutes.
How did Marriott use economies of scope to achieve greater economic value than its competitors?
Marriott lowered its cost structure by sharinng its production assets over several types of hotels, which increased the diversity of its hotel line and thus differentiated appeal.
The major value drivers that managers have at their disposal include product features, customer service, and complements.
TRUE
In Strategy Highlight 2.2, what type of strategy did Diana, the Starbucks store manager in southern California, use to develop the new iced beverage for her store? A. She used a rational planning approach to strategy planning. B. She created a dominant strategy plan. C. She used scenario planning. D. She used an emergent strategy.
She used an emergent strategy
In order to better achieve a competitive advantage, firms must now adopt a holistic approach towards satisfying multiple stakeholders opposed to focusing on the needs of their stockholders. This integrative approach is referred to as
Stakeholder Strategy
______ is best described as an integrative management field that combines analysis, formulation, and implementation in the quest for competative advantage.
Strategic Management
Keeping in mind the five forces in the airline industry, which of the following best explains the difficulty airlines have in generating a profit?
Substitutes are readily available in the form of trains, buses, and cars, thus reducing the profit potential in the industry.
Golden Soles has been successful at differentiating itself from competitors by claiming a premium price for its athletic footwear based on superior design and high-quality materials. In this scenario, which of the following is the key value driver?
product features
Top-down strategic planning as an approach to the strategic management process will be most effectivve when the
size of the firm is large
A firm's ________ relates to its ability to create value for customers (V) while containing the cost to do so. (C)
strategic position
Strategic thinking is different from strategic planning in that
strategic thinking includes all types of information sources while strategic planning does not.
Bright Lighting was the first company to start selling LED light bulbs in its country-a product that gained popularity among diverse groups. Soon, other companies started to sell their own brands of LED bulbs, thereby giving Bright Lighting ample competition. In response, Bright Lighting decided to limit its LED light bulbs to outdoor models. However, it ensured that these models were the longest-lasting and lowes priced on the market. With this innovation, Bright Lighting consistently outperformed its competitors for ten years. In this scenario, Bright Lighting maintained a ______ through its innovative strategy.
sustainable competative advantage.
Due to economic regression in Jabu, the profitability of the large conglomerate Honey Comb Inc. was poor. An analysis of the company's business showed that the company could become profitable if it divested a few strategic business units under its banner. From which of the following businesses would Honey Comb Inc. find it most easy to exit?
the e-commerce retail business, where investments on assets are low.
In the multiplex industry, Home Again Movies Inc. is an upscale multiplex that focuses on their superior customer experience. The firm charges premium prices for its movie tickets and services. Movies-for-less Inc., in contrast, charges the lowest price in the industry with no-frills approach. In between these two segments is Just Right Films Inc., which offers a customer experience comparable to that of Home Again Movies at a proce almost as low as that of Movies-for-less. What strategy is Just Right Films pursuing in this scenario?
blue ocean strategy
In 2008, BlackBerry's market cap peaked at $75 billion. By 2015 this valuation had fallen more than 90 percent, to less than $7 billion. BlackBerry fell victim to two important PESTEL factors in its external environment: sociocultural and technological. How did technology contribute to BlackBerry's decline? A. BlackBerry failed to offer strong security features for its device. B. BlackBerry failed to change its device into one that could perform multiple tasks effectively. C. BlackBerry failed to adapt to a groundswell that involved workers bringing mobile devices to work. D. BlackBerry failed to produce an efficient emailing system using a keyboard.
BlackBerry failed to change its device into one that could perform multiple tasks effectively.
Batt Packs recently came under criticism when a newspaper article revealed that the company's production plant had leaked a chemical compound into a sensitive wetland ecosystem. Although use of the chemical was not technically prohibited by law, the local government levied a small fine for cleaning up the spill. Environmental groups, however, argued that continued use of the chemical was damaging to the local wildlife and threatened to organize a boycott against Batt Packs. What should Batt Packs do to ensure that it meets its ethical responsibilities?
Design batteries without the chemical and market them as environmentally friendly.
Digital Prosper, a web service firm, has experienced a 7 percent decline in revenues in consecutive quarters. In an effort to reduce operating costs, managers reduced the customer service staff from 12 employees to 6. Management also enlisted the remaining employees to help produce a new company vision: to give customers of all budgets a customizable, stress-free web hosting experience. What is wrong with this scenario?
Digital Prosper's vision is not customer-oriented.