Exam 3
Which of the following is an accurate statement about learning effects?
learning effects occur over time as output accumulates
One of the risks of pursuing a blue ocean strategy is that a firm can find itself
"stuck in the middle"
The Konex Hotel Group purchased Green-Plus Hotels for an estimated value of $120 billion. All the hotels previously owned by Green-Plus Hotels are now managed by the konex Hotel group and are known as Konex hotels. What does this scenario best Illustrate:
Acquisition
When large, incumbent firms buy start-up companies, the transaction is generally described as a(n)
Acquisition
there are several mechanisms in which strategic alliance can be governed. Which of the following below is not one of those ways.
Acquisitions
When firms innovate by leveraging existing technologies into new markets, they are said to be involved in
Architectural innovation
Janet wants to restructure the portfolio or all her firm's strategic business units. Janet will more than likely emoloy the ________ tool
BCG
A _______ primarily details the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market
Business level strategy
InGen Pharmaceuticals Inc. Deskton Pharma lnc, and Wen Pharma lnc. are three rival firms who have set up an alliance to conduct research and find a cure for cancer. They have made almost equal contributions to the research, and they also share their expertise with one another. However, the three firms will continue to behave as competitors in markets for other drugs and vaccines. What is this arrangement best referred to as?
Co-opetition
_____________ is best described as decreases in cost per unit as output increases.
Economies of scale
Which of the following lists the stages of the industry life cycle in the correct order?
Introduction, growth, shakeout, maturity, decline
Which or the following statements is true of joint ventures?
They enable the exchange of both tacit and explicit knowledge.
Decisions relating to the range of products and services a firm will offer determine the firms
level of diversification
Grace wants to form a voluntary arrangement with another firm in order to gain more flexibility in her supply chain, complementarity to a few of her support activities via her value chain, and strengthen her firm's overall competitive position. Grace is looking for a simple and common type or alliances, lIke
a non-equity alliance
Delos Autos Inc., a large automobile company, made an initial small investment in a start up company that was developing a solar-powered car. This gave Delos Autos controlling interests in the start-up company. However. Delos Autos had no obligations to make continued investments in the experiments of the start-up company. It could invest small amounts depending on the new product's success at each stage of its development. If the product proved to be successful, Delos Autos would have the right to buy out the start-up company. this approach to strategic alliance is referred to as
a real-options perspective
The strategic objective of a first mover during the introduction stage of the industry life cycle is to
achIeve market acceptance
Billy is the CEOof Billy's Kicks, a soccer ball retailer. He decides to purchase the synthetic rubber manufacturing firm so he can create his own soccer balls and sell them nationally, in his retail stores. In order to do this, Billy will need to engage in which is a corporate level strategy
backward vertical integration
When a firm is able to successfully employ a blue ocean strategy. it will create a competitive advantage by
beating rivals on product attributes while offering a better price.
In a successful ____ strategy, the trade-offs between differentiation and low cost are reconciled
blue ocean
several notable firms like Eli Lilly, HP. Procter & Gamble, and IBM each wish to become the alliance "partner of choice for small technology ventures, colleges, and inventors. they each know that ___________ is a necessary and critical element for alliance to be a success
building interorganizational trust
Bob is the strategic business unit (SBU) CEO in charge of manufacturing cufflinks for men's clothing. While the market he competes in is low growth, Bob's SBU's earnings and cashflow are both ranked at high and stable. When examining Bobs SBU through the Boston Consulting Group (BCG) matrix lens, we can conclude that his SBU would be classified a
cash cow
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
When total semiconductors was operating at the minimum efficient scale of 10,000-12,000 units per month, the firm's cost per unit was $45, However, when output level was Increased beyond 12,000 units, the cost per unit increased to $4% This increase was attributed to the wear-and-tear of the machinery and coordinating. What is this phenomenon known as?
diseconomies of scope
Digital photography replacing film photography is an example of which type of innovation:
disruptive
Pete F Gee sell's Big Dog Choppers, a special typeof motorcycle. His business generates roughly 80 percent of his revenues from selling these motorcycles and about 20 percent on motorcycle repair and service. Pete E' Gee would be classified as a _______ firm
dominate business
The group of customers referred to as the ________ lead the wave of increased demand as the industry moves from the introduction stage to the growth stage
early majority
Marriott is able to create greater economic value than its competitors due to their ability to take advantage of __________, which describe the savings that come from producing two (or more) outputs at less cost than producing one output individually, while utilizing the same amount of resources and technology.
economics of scope
Jill is the CEO of Note's Etc, a stationary manufacturer. She decides to open up a retail store to sell her products directly to consumers instead of just selling to retailers. In order to do this, Jill will need to engage in _________ which is a corporate level Strategy
forward vertical integration
Jennifer is the strategic business unit (BU) CEO in charge of manufacturing stereo speakers for computers and laptops. Her SBU earnings and cash flow are both low and unstable. Which of the following strategies should Jennifer enact if examining her BU through the Boston Consulting Group (BCG) matrix lens?
harvest or divest
The primary goal of a firm pursuing a blue ocean strategy should be to
offer a differentiated product or service at a low cost
Facebook has become one of the largest media companies in the world, valued at nearly 50 billion in 2019, but hasn't produced a single piece of content. Facebook is an example of a
platform business
Managers in a firm hired to improve the firm's profitability and ultimately the shareholders' value will add to the overall costs if the pursue their own self-interests.What does this best illustrate?
principal-agent problem
Connell Inc. has been successful at differentiating itself from competitors by claiming a premium price for digital cameras based on superior image quality and advanced technology. In this scenario, which of the following is the key value driver?
product features
What is the main reason that most mergers and acquisitions negatively affect shareholder value?
promIsed synergies never take place
In terms of the build-borrow-or-buy framework, a firm's internal resources are considered to be relevant when they are
similar to those that need to be developed and superior to those of competitors in the targeted area.
Becasue facebook receives almost all of its revenues from online advertising, we would conclude that Facebook would be characterized as a(n) _________ firm, which has the lowest levels of corporate diversification
single business
Since Coca-Cola focuses on selling only soft drinks, a low degree or product diversification, we would conclude that they compete in a(n) ___________ market versus their main competitor Pepsico, that sells a wide variety of products
single product
A voluntary arrangement between firms that involves the sharing of knowledge, resources, and capabilities with the intent of developing processes. products. or services is best described as a
strategic alliance
Bill's Hockey Pucks Inc. wishes to pursue international markets like China and Russia: In order to do this, they may wish to consider a possible
strategic alliance with another firm already established in those markets
Mark owns Drones 'R' Us, Inc. and is looking for an alternative to vertical integration. He decides to manufacture some of his owns parts While keeping a few key suppliers in his industry value chain as well. This is known as
taper integration
In order for a firm to formulate an effective business-level strategy, It is Important to remember that competitive advantage Is determined by
the characteristics of both the industry and the firm
What is horizontal integration?
the process of merging with a compettior at the same stage of the value chain
one of the reasons that big box retailers like home Depot are able to achieve economies of scale is that
they are able to take advantage of physical properties and maximize heir scale efficiencies by stocking more merchandise handling inventory more efficiently.
The goal of a strategic, position is to create the largest gap possible between the _________ that a firm creates through, its offerings and the _________ required to create these offerings.
value; Cost
Decisions relating to "what stages of the industry value chain to participate in determine a firms
vertical integration
what does a merger between companies typically occur?
when two firms of comparable size join to form a combined entity