Integrated Business Exam 1

Which of the following statements is true of the social responsibilities of a business? Ethical responsibilities are the foundational building block of a firm's social responsibility. Legal responsibilities are often subsumed under the idea of corporate citizenship, reflecting the notion of voluntarily giving back to society. Shareholders mandatorily require a firm to perform its ethical and philanthropic responsibilities. A firm's ethical responsibilities go beyond its legal responsibilities.

A firm's ethical responsibilities go beyond its legal responsibilities.

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. AFE: Analyze-Formulate-Execute AFI: Analysis, Formulate, Implementation API: Analyze-Plan-Implement APE: Analyze-Plan-Execute

AFI: Analysis, Formulate, Implementation

Which of the following tasks in the AFI strategy framework involves evaluating the internal and external environments in which a firm operates? Competitive Advantage Formulation Implementation Analysis

Analysis

Cartzy Inc., Cartific Inc., and Clustercart Inc., are three consumer-product retailing companies. 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 of their products. Judging from the market conditions described in this scenario, which of the following statements is true? Resource immobility of the firms will be low. The industry structure will be far from perfect competition. Barriers to entry within the industry will be high. Any advantage that one firm has will be short-lived.

Any advantage that one firm has will be short-lived.

Which of the following fundamental insights was provided by Porter's five forces framework from the completion of the Alta Velocidad Española (AVE)? Any of the five forces on its own, if sufficiently strong, can extract industry profitability. Competition must be defined more narrowly to remain confined to the industry's closest competitors. A strong threat of substitutes decreases the rivalry among existing competitors. All of the five forces must work together to have a meaningful impact.

Any of the five forces on its own, if sufficiently strong, can extract industry profitability.

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. Functional Strategy Business Strategy Corporate Strategy Implementation

Business Strategy

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 of monopolization conglomeration Co-opetition perfect competition

Co-opetition

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, Alaska Airlines, 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? American, United, and Delta Airlines will be affected differently by Porter's five competitive forces. Competitive rivalry between Virgin Atlantic and JetBlue is likely to be higher than that between American and Southwest Airlines. Competitive rivalry between Virgin Atlantic and Delta Airlines is likely to be higher than that between American, Delta, and United Alaska Airlines and Delta Airlines will be affected by the external environment in very similar ways.

Competitive rivalry between Virgin Atlantic and JetBlue is likely to be higher than that between American and Southwest Airlines.

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? Consumer demand will increase Economic growth rate will fall. Cost of capital for firms will be high. Firms will invest less in future growth.

Consumer demand will increase

The CEO of All Star Corp. has decided to enter the markets of emerging nations like China and Brazil. This means that the books, magazines, and websites published under the Chyron Media banner would be made available in these nations. Which of the following strategies does this scenario best illustrate? Divisional Strategy Functional strategy Business strategy Corporate Strategy

Corporate Strategy

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 Correct—competitive advantage is achieved through profitability alone. Incorrect—Bill's Auto & Airplane Repair shop more than likely has a sustained competitive advantage since his business is diversified. Correct - competitive parity is achieved by generating average returns, relative to competition in a given industry. Correct—competitive advantage is achieved since Bill's Auto & Airplane Repair shop has a positive net income.

Correct - competitive parity is achieved by generating average returns, relative to competition in a given industry.

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. VRIO framework law of diminishing returns Dynamic Capabilities Perspective SWOT analysis framework

Dynamic Capabilities Perspective

Andrew is a management consultant. Hard Supplies Inc. asks him to evaluate their company, and he finds that the difference between the cost of producing the firm's products and the value of those products is extremely narrow. What should Andrew suggest that Hard Supplies Inc. management do? Shore up the company's strong position by erecting entry barriers. Find a way to widen the gap between cost and value. Find a way to pass on as much profit as possible to suppliers and customers. Encourage customers to buy complements to their products.

Find a way to widen the gap between cost and value.

The distribution department at Wheat, Barley and Whey Corp. has decided to adopt the FIFO (first in, first out) method of inventory to dispatch its bags of wheat. Which of the following strategies does this scenario best illustrate? Business Strategy Corporate Strategy Master Strategy Functional Strategy

Functional Strategy

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? HD will keep its customer service at an acceptable level, while Good Ole Cinemas will provide superior customer service. Good Ole Cinemas and HD will use a similar approach to create value for customers by attempting to offer everything to everybody. HD and Good Ole Cinemas will not be direct competitors to each other, and their customer segments will overlap very little. Good Ole Cinemas will charge a premium price for its customers, while HD will implement everyday low pricing.

HD and Good Ole Cinemas will not be direct competitors to each other, and their customer segments will overlap very little.

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? Level 4 Level 5 Level 3 Level 2

Level 4

Which of the following options below would serve as a feasible option when decidinghow to enter an established industry? initiate a green field operations raise stakeholder capital by issuing stock Leveraging existing assets Only enter an industry that is an oligopoly

Leveraging existing assets

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. Organizational core values upper-echelons theory product-oriented vision Scenario Planning

Organizational core values

Value chain analysis consists of systematically analyzing a firm's key activities that for analysis purposes are categorized into two groups: customers and suppliers. profits and losses products and service activities. Primary activities and support activities

Primary activities and support activities

Hank runs a company that manufactures satellites for commercial and government use. It has 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? This firm is an example of near-perfect competition. The company is likely to be very profitable as long as the threat to entry is low. The manufacturer is likely to see little profit until the power of buyers improves. In this scenario, suppliers are likely to create and sell effective substitutes.

The company is likely to be very profitable as long as the threat to entry is low.

Which of the following applies to the Strength-Threats quadrant of the SWOT matrix? The local fast-food chain Easy Hot Dogs used its wholesome image to maintain its competitive advantage against stiff competition 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. The local fast-food chain Easy Hot Dogs expanded its limited menu to maintain its advantage against stiff competition The local fast-food chain Easy Hot Dogs added a salad bar to maintain its competitive advantage against stiff competition.

The local fast-food chain Easy Hot Dogs used its wholesome image to maintain its competitive advantage against stiff competition

Which of the following is an assumption that top-down strategic planning rests on? Change is constant Time cannot be compressed at will. We can predict the future from the past. Decisions made in the past do not affect our future.

We can predict the future from the past.

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? Help us help you find a home. Our mission is to turn this not-for-profit organization into a for-profit organization so that the stakeholders benefit. We help the homeless gain and sustain financial independence by providing employment opportunities. One day, everyone in this nation will have a home to protect themselves.

We help the homeless gain and sustain financial independence by providing employment opportunities.

Which of the following best qualifies as a firm's internal stakeholder? a manager taking care of the firm's operations in a foreign market a competitor manufacturing the same products as that of the firm a labor union with whom the firm's employees can affiliate an auditor assigned to the firm by a federal government agency

a manager taking care of the firm's operations in a foreign market

All of the following are external stakeholders except which of the following Creditor Alliance Partner competitors customer

competitors

Jennifer was just named the CEO of a pen company called National Pens Inc. She immediately changed the name to "Jenn's Pens." When asked why she made this change by the board of directors, who showed research that there was no correlation between success and CEP names, 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 her confirmation bias escalation of committment groupthink optimal decision making

confirmation bias

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.? substitution direct imitation innovation strategic equivalence

direct imitation

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. ethical economic demographic legal

ethical

A firm will fail to create a sustained competitive advantage when the source of its competitive advantage is socially complex source of its competitive advantage is causally ambiguous resource bundles exhibit heterogeneity and immobility fit between its internal strengths and the external environment is static.

fit between its internal strengths and the external environment is static.

The first step in stakeholder impact analysis involves describing the economic, legal, ethical, and philanthropic responsibilities of the firm toward society. identifying the opportunities and threats the stakeholders present formulating a stakeholder strategy to balance the different needs of various stakeholders identifying the stakeholders that currently have, or potentially can have, a material effect on a company.

identifying the stakeholders that currently have, or potentially can have, a material effect on a company.

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 capital requirements in the industry are high if the customer switching costs in the industry are high if the industry has recently become deregulated if the company is able to put up a credible threat of retaliation

if the industry has recently become deregulated

Due to several black swan events in the past, the need for corporate governance and transparency has decreased within various industries. nations around the globe have explicitly appreciated and accepted capitalism as an economic system. implicit trust relationship between the corporate world and society at large has deteriorated. shareholders of public companies have become more confident in investing their resources in businesses.

implicit trust relationship between the corporate world and society at large has deteriorated.

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 that this amount is excessive for workers whose only job is to clear tables. By continuing to adhere to the rules set by the government of Hanns, which of the following responsibilities is Delish satisfying? philanthropic responsibilities demographic responsibilities legal responsibilities Ethical responsibilities

legal responsibilities

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. Interest Rates ecological factors lobbying forces demographic research

lobbying forces

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 select None of these are substitutes Tractors motorcycles. hot air balloons

motorcycles

________ are considered the ethical standards and norms that govern the behavior of individuals within a firm. organizational core values vision statement strategic leadership mission statement

organizational core values

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 of causal dependence Path Immobility path dependence dependence complexity

path dependence

Which of the following below is NOT categorized as a primary activity on Porter's Value Chain? Sales and marketing operations after sales service procurement

procurement

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? resource homogeneity resource cost resource substitution resource immobility

resource immobility

If a company wants to gain a competitive advantage in a highly competitive industry, it should ideally stake out a unique position within the industry. Execute an integrated cost-leadership and differentiation position. provide goods or services similar to its competitors at higher prices. copy the strategies of other firms through competitive benchmarking.

stake out a unique position within the industry.

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's octroi charge Switching costs excise duty opportunity costs

switching costs

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? the cloud computing service that it uses the capital the company raised from its shareholders the headquarters building owned by the company the expertise acquired by the employees in the company

the expertise acquired by the employees in the company

Who among the following is responsible for making business strategies in a large conglomerate? the shareholder of the company the board of directors at the headquarters the lower-level employees in the company the general managers of individual business units

the general managers of individual business units

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 reputation for fast customer service a culture of proactive communication patents for electronic components the punch presses that produce parts

the punch presses that produce parts

Which of the following is a customer-oriented vision? to be the most progressive insurance company to enable businesses to improve their employee communications to manufacture innovative products through continuous learning to be the best automobile company in the world

to enable businesses to improve their employee communications

Which of the following features about a buyer indicates that the buyer has high bargaining power? when the buyer purchases inputs that are standardized or undifferentiated commodities when the buyer faces high switching costs when the buyer cannot purchase specific products from other sellers when the buyer cannot credibly threaten to backwardly integrate into the industry

when the buyer purchases inputs that are standardized or undifferentiated commodities