MAN 4720 quiz 1-5
Let's Talk Corp. is a public company whose shares are currently trading in the market at $150 each. The company manufactures smartphones at the cost of $300 per unit and sells them in the market for $500 each. What is the company's producer surplus? - $150 - $300 - $650 - $200
$200
By selling a laptop at $1,200 for which consumers are willing to pay up to $1,300, a consumer electronics firm makes a profit of $500 per unit. What is the economic value created in this scenario? - $600 - $1,300 - $1,200 - $700
$600
Which of the following statements about competitive advantage is NOT true? - A firm will have a sustainable competitive advantage when it outperforms its competitors over a prolonged period of time. - A firm can gain a competitive advantage by providing goods similar to its competitors' goods at a lower price. - A firm's competitive advantage is always absolute, not relative. - A firm's past performance does not guarantee its future performance.
A firm's competitive advantage is always absolute, not relative.
Which of the following is an advantage of accounting data? - Accounting data consider off-balance sheet items, which makes comparing companies with different capital structures easy. - Accounting profitability ratios not only show us the outcomes from past decisions, but also provide information to guarantee future performance. - Accounting data can be easily transformed into financial ratios to help assess and evaluate the competitive performance of firms. - Accounting data focus mainly on intangible assets, which are more important than tangible assets in firms' stock market valuations.
Accounting data can be easily transformed into financial ratios to help assess and evaluate the competitive performance of firms.
Which of the following statements is true of strategy? - EatNow will not face any direct competition in the industry. - Tactical tools that are a part of a firm's functional and global initiatives are strategy. - Operational effectiveness and competitive benchmarking are strategies. - Actions that allow a firm to address a competitive challenge are strategy.
Actions that allow a firm to address a competitive challenge are strategy.
_________ is best described as the difference between the value a consumer attaches to a good or service and what he or she paid for it. - consumer equity - consumer lifetime value - consumer surplus - consumer price index
Consumer surplus
Which of the following statements does the upper-echelons theory support? - Organizational outcomes including strategic choices and performance levels reflect the values of external stakeholders. - The leadership actions of executives are independent of their characteristics like age, education, and career experiences. - Strong leadership is solely the result of innate abilities and not learning. - Executives interpret situations through the lens of their unique perspectives, shaped by personal circumstances, values, and experiences.
Executives interpret situations through the lens of their unique perspectives, shaped by personal circumstances, values, and experiences.
FL Systems Inc. and Oryxo Systems Inc. are two competing firms. FL Systems Inc. has $300,000 in tangible assets and $200,000 in intangible assets. Oryxo Systems Inc. has $150,000 in tangible assets and $347,000 in intangible assets. In the context of the resource-based view, which of the following is the most likely implication of the asset values of the two companies? - Oryxo Systems Inc. has less valuable resources than FL Systems Inc. - Oryxo Systems Inc. has less invisible assets than FL Systems Inc. - FL Systems Inc. will find it harder than Oryxo Systems Inc. to attain competitive advantage. - FL Systems Inc. will find it easier than Oryxo Systems Inc. to sustain competitive advantage.
FL Systems Inc. will find it harder than Oryxo Systems Inc. to attain competitive advantage.
Which of the following is not true concerning a customer-oriented mission? - It defines the means of how a customer need will be met. - It has more flexibility than a product-oriented mission. - It has a higher likelihood of remaining relevant in the long-term. - Organizations that have customer-oriented missions are more likely to be successful.
It defines the means of how a customer need will be met.
Which of the following is not a disadvantage of the balanced scorecard approach? - It is a tool merely for strategy implementation, not for strategy formulation. - It fails to allow managers to prepare the company for future growth. - It fails to provide much insight into how metrics that deviate from the set goals can be put back on track. - It provides only limited guidance about which metrics to choose to measure competitive advantage.
It fails to allow managers to prepare the company for future growth.
Let's Roll Inc. and Ride 4 Ever Cycles Inc. are two competing motorcycle companies. While Let's Roll's Cost of goods sold/Revenue is 63.4 percent, the Cost of goods sold/Revenue of Ride 4 Ever Cycles is 54.2 percent. What do you infer from this financial data? - Let's Roll is less efficient than Ride 4 Ever Cycles in producing goods. - Let's Roll has a higher profit margin than Ride 4 Ever Cycles. - Let's Roll and Ride 4 Ever Cycles have achieved a competitive parity. - Let's Roll is able to command a greater price premium for its products than Ride 4 Ever Cycles.
Let's Roll is less efficient than Ride 4 Ever Cycles in producing goods.
In the financial year 2016, for every $100 in revenues, Microsoft earned $21.5 in profit, while Apple earned $20.6 in profit. This demonstrates that - Microsoft was more efficient than Apple in producing its goods. - Apple's inventory turnover was more than that of Microsoft's. - Microsoft was using its capital more efficiently to generate revenue than Apple. - Microsoft's return on revenue was higher than that of Apple.
Microsoft's return on revenue was higher than that of Apple.
________ tends to be more fierce when exit barriers in the industry are high, resulting in some firms being locked into the industry. - competitive rivalry - strategic complements - co-opetition - strategic commitments
Strategic Commitments
Onivo Auto Inc. has been the leader in low-cost and fuel-efficient engine technology for many years. It has been able to sustain its competitive advantage primarily because of its highly efficient automobile engines, which competitors have been unable to develop or buy at a reasonable price. In the context of the VRIO framework, which of the following resource attributes most likely underpins Onivo's competitive advantage? - The resource is easy to replicate. - The resource is costly to imitate. - The resource neutralizes external opportunities. - The resource decreases the perceived value of its products.
The resource is costly to imitate.
Incumbent firms can benefit from several important sources of entry barriers. Economies of scale are one such source. Which of the following is an implication of economies of scale for incumbent firms? - They cannot employ technology efficiently. - They can spread fixed costs over lesser units. - They benefit from a less specialized division of labor. - They can demand better terms from their suppliers.
They can demand better terms from their suppliers.
Which of the following statements accurately brings out the difference between an organization's vision and mission? - Mission is the organization's aspirations for the future and vision is about how these aspirations can be made true over time. - Vision is short-term: oriented and related to the organization's present, whereas the mission is futuristic. - Vision is valid at the functional level of the organization, whereas mission covers the entire organization. - Vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished.
Vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished.
Which of the following statements accurately brings out the distinction between a firm's resources and capabilities? - While a firm's resources are always tangible, its capabilities are by their very nature intangible. - While resources reinforce core competencies, capabilities allow managers to orchestrate their core competencies. - Unlike resources, capabilities do not find their expression in the firm's structure, routines, and culture. - Unlike capabilities, the resources of the firm cannot be imitated by its competitors.
While resources reinforce core competencies, capabilities allow managers to orchestrate their core competencies.
Which of the following firms most likely has the lowest bargaining power as a buyer? - an automobile company that can backwardly integrate to produce its own component parts - a fast food chain that has multiple suppliers for processed meat - a government agency that buys large quantities of cement from a private supplier - a cell phone company that requires highly customized software for its phones
a cell phone company that requires highly customized software for its phones
A firm's _______ are best described as distinct and fine-grained business processes such as order taking, physical delivery of products, or invoicing customers. - resource flows - capital gains - activities - capabilities
activities
In the context of the VRIO framework, a resource is said to be valuable if it - allows a firm to take advantage of an external opportunity. - helps a firm increase its costs but lower its prices. - results in a perfectly competitive industry structure. - leads to competitive parity within an industry.
allows a firm to take advantage of an external opportunity.
In a perfectly competitive industry structure - resource immobility is high. - resource heterogeneity is high. - any competitive advantage that one firm has will be short-lived. - competitors cannot quickly acquire resources used by the current market leader.
any competitive advantage that one firm has will be short-lived.
Which of the following groups is most likely to be considered a firm's internal stakeholder? - creditors - customers - alliance partners - board members
board members
In the 1980s, Japanese competitors brought better-quality chips to the market at lower cost, threatening Intel Corporation's position and strategic plan regarding the production of DRAM (dynamic random-access memory) chips. When the functional managers at Intel came up with the simple rule of producing whichever product delivered the higher margin, the front-line managers shifted Intel's production capacity away from the lower-margin DRAM business to the higher-margin semiconductor business. This ________ emerged as a consequence of the firm's resource allocation process. - unrealized strategy - strategic alliance - intended strategy - bottom-up strategy
bottom-up strategy
What term is used to describe cooperation by competitors who want to achieve a strategic objective? - co-opetition - strategic competition - complementary assets - strategic commitment
co-opetition
The board of directors of Qwik Inc., a company that has a large product mix, has decided to get actively involved in research and development for the next three financial years. Budget for each business unit under the company will be allocated from the headquarters in proportion to its previous performance. The board has also decided to liquidate those units that have failed to perform so far. Which of the following strategies does this scenario best illustrate? - functional strategy - business strategy - divisional strategy - corporate strategy
corporate strategy
Measuring how a customer views a firm under the balanced scorecard framework is important because - customer perspective is directly linked to a firm's revenue and profit. - the customer perspective reveals how rivals operate in the same industry. - garnering customer feedback signals their importance to the company. - knowing how customers view us can help us predict when an economic recession is coming.
customer perspective is directly linked to a firm's revenue and profit.
For a firm to sustain its competitive advantage, any fit between its internal strengths and the external environment must be - dynamic - static - valuable - permanent
dynamic
The sum of consumer surplus and producer surplus for a good or service equals the - reservation price - firm's profit - economic value created - total return to shareholders
economic value created.
The value of goods/services in the eyes of consumers is static which makes it difficult to accurately assess what someone is willing to pay for that product and service. This limitation is most directly tied to which of the following multi-dimensional perspective below? - return on invested capital (ROIC) - accounting profitability - shareholder value appreciation - economic value creation
economic value creation
In the context of SWOT analysis, a firm can develop a defensive strategic option primarily by - maximizing an external strength to exploit an internal opportunity. - eliminating an internal weakness to mitigate an external threat. - leveraging an external opportunity to overcome an internal threat. - using an internal strength to exploit an external opportunity.
eliminating an internal weakness to mitigate an external threat.
All of the following below are examples of external stakeholders except - employees - government - communities - customers
employees.
Gadgets n' Stuff Inc. is a vendor who supplies machine parts to an appliance manufacturing company. In return, Gadgets n' Stuff Inc. relies on the company for its revenue and is affected by any decisions taken by the company. In this scenario, Widgets Inc. is a(n) _________ for the appliance manufacturing company. - external stakeholder - focus group - representative sample - internal stakeholder
external stakeholder
A fragmented industry turns into a consolidated industry when - there are no restrictive government policies introduced in the industry. - firms reduce competition within the industry through mergers and acquisitions. - the barriers to enter the industry are reduced. - the products/services are seen as commodities.
firms reduce competition within the industry through mergers and acquisitions.
MicroChips Corp. is a company that supplies microprocessors to 2020 Processors Inc., a computer hardware company. When 2020 Processors Inc. demands lower prices for the microprocessors, MicroChips Corp. makes it clear that it would profit more from launching its own brand of laptops and desktops in the market. Fearing the competition it would then face from MicroChips Corp., 2020 Processors Inc. decides to buy the microprocessors at the quoted price itself. In this scenario, MicroChips Corp., as a supplier, has exercised its bargaining power by threatening to - forward integrate - crowdsource - outsource - backward integrate
forward integrate
Hit Me Up is an instant messaging mobile application. Users have access to a basic version with limited message recipients for free, but they have to pay a fee to have unlimited message recipients or to use advanced features. Which of the following business models does this best illustrate? - subscription-based - freemium - pay-as-you-go - razor-razor blade
freemium
Product-oriented vision statements provide managers with - goals for employee development - goals to improve service - strategic flexibility - ways to solve customer problems
goals to improve service.
The greater the difference between value creation and cost, the - less likely a firm will gain competitive advantage. - greater a firm's economic contribution. - greater a firm's competitive parity. - less likely that a firm's strategic position will be competitive.
greater a firm's economic contribution.
The pattern of faulty and biased decision making that occurs in groups whose members strive for argument at the expense of good decision making is called - brainstorming - groupthink - devil's advocacy - bounded rationality
groupthink
Which of the following questions would a firm's business strategy ideally answer? - how should we compete? - where should we compete? - why should we compete? - how should we implement the functional strategy?
how should we compete?
According to the resource-based view, a firm's competitive advantage often stems from its ___________ opposed to its ___________. - intangible resources; tangible resources - tangible resources; intangible resources - current assets; long-term assets - long-term assets; current assets
intangible resources; tangible resources
If a company has 25 million shares outstanding, and each share is traded at $400, the ________ is $10 billion. - total return to shareholders - market capitalization - customer lifetime value - return on revenue
market capitalization
An organization's ________ describes what the organization actually does—the products and services it plans to provide, and the markets in which it will compete. - mission - vision - promissory note - code of conduct
mission
When an organization briefly describes what they do and how they do it, they have more than likely articulated their - values statement - mission statement - strategic plan - strategic intent
mission statement
In the restaurant industry, a large number of restaurants cater to similar customer needs. However, each restaurant makes its product unique by offering a different cuisine, a different ambience, organic ingredients, or different services like home delivery. This differentiation allows each restaurant to set its own prices. Thus, the restaurant industry best illustrates a(n) - perfectly competitive structure. - monopolistically competitive structure. - monogopoly. - oligopoly.
monopolistically competitive structure.
When asked to explore the strengths and weaknesses of a firm, which of the following would be the best framework to employ? - value chain analysis - PESTEL analysis - five forces analysis - none are correct
none are correct
Owners of coffee plantations in the country of Cantonica grow their own coffee beans and supply them to various stores and restaurants all over the country. There are many plantation owners supplying to a huge number of companies, and they are typically unable to differentiate their products from one another. They also do not have the power to fix their own prices in the industry. In addition, these suppliers can only achieve competitive parity and not a competitive advantage. Thus, the coffee bean industry in Cantonica best illustrates a(n) ________ structure. - monopolistically competitive - oligopolistic - monopolistic - perfectly competitive
perfectly competitive
Restrictions imposed by the government, such as export quotas on certain products, are a part of the ________ environment of the PESTEL framework. - economic - sociocultural - ecological - political
political
A firm decides to retain $20,000 from its annual earnings and invest it in developing an advanced manufacturing system. According to the dynamic capabilities perspective, the $20,000 would most likely be referred to as the firm's - capital gain - frozen asset - resource flow - marginal utility
resource flow
A consolidated industry turns into a fragmented industry when - restrictive government policies are introduced in the industry. - firms reduce competition within the industry through mergers and acquisitions. - technological advances lead to industry convergence. - network effects enjoyed by incumbent firms within the industry become stronger.
restrictive government policies are introduced in the industry.
Which of the following SWOT factors are internal to the firm? - strengths and weaknesses - weaknesses and opportunities - opportunities and threats - threats and strengths
strengths and weaknesses
Which of the following groups will not be considered a company's internal stakeholder? - suppliers - board members - shareholders - managers
suppliers
All of the following are examples of internal stakeholders except. - employees - stockholders - board members - suppliers
suppliers.
Which of the following does a firm possess when it can outperform other firms in the same industry or the industry average over a prolonged period of time? - consistent power position - long-term capital gain - strategic positioning - sustainable competitive advantage
sustainable competitive advantage
While most of Savvy Inc.'s competitors were moving toward developing and emerging markets, Savvy Inc. decided to keep its operations limited to its home country so that it could gain some advantage. A few years later, however, Savvy Inc. lost its footing in the home market due to a sharp fall in demand. It then decided to invest in large-scale operations in the same developing nations as its competitors, within a short period of six months. However, its costs kept increasing, so it could not compete against the already established brands. In this scenario, the failure of Savvy Inc. can be best attributed to - time compression diseconomies. - better expectations of future resource value. - economies of scale. - resource mobility.
time compression diseconomies.
Evaluating the data collected from environmental analysis, the corporate executives of BigPharma Inc. realized that it was the right time to expand the business. The company's vision was accordingly adjusted from "To Be the Best in the Pharmaceutical Industry" to "To Make Good Health Accessible to Everyone around the Globe." To support the new vision, the executives decided that the company would first enter the Asian market where its growth potential would be huge. To further support these decisions, the general managers of different SBUs and the functional managers formulated their own strategies. Which of the following approaches to the development of strategy does this best illustrate? - scenario planning - bottom-up strategic approach - reverse mentoring - top-down strategic planning
top-down strategic planning
When a company makes improvements in its social, economic, and ecological performance, it is adopting a ________ approach to assessing competitive advantage. - strategic - triple bottom line - balanced scorecard - customer-centric
triple bottom line
Using the _______, managers can see how competitive advantage flows from a firm's distinct set of activities. - resource-based view - VRIO framework - value chain analysis - SWOT analysis
value chain analysis
The _______ describes the internal activities a firm engages in when transforming inputs into outputs. - resource-based view - PESTEL analysis - value chain view - SWOT analysis
value chain view
A good strategy should be able to provide products and services to customers at an attractive price point while maintaining internal costs, resulting in - value creation. - shareholder appreciation. - competitive benchmarking. - sustainable competitive advantage.
value creation.
Economic contribution is created when the - revenue generated by selling a unit of a product is equal to the cost incurred by the firm in producing it. - price a customer is willing to pay for a good or service is more than the cost the firm incurs to produce it. - price a customer is willing to pay for a good is less than what it costs the firm to manufacture it. - value a consumer attaches to a good or service is lesser than what he or she paid for it.
price a customer is willing to pay for a good or service is more than the cost the firm incurs to produce it.
A firm is likely to have a competitive advantage when it - performs at a level similar to the other firms in the industry. - provides goods similar to those of its competitors, but at a higher price. - provides services that consumers will value more than those of its rivals. - minimizes the difference between value creation and the costs involved.
provides services that consumers will value more than those of its rivals.
Which of the following has contributed to Tesla's competitive advantage in terms of stock appreciation? - copying the most popular features of competitors' vehicles - reinvesting profits to continually design and produce better electric vehicles - keeping its proprietary technologies secret - using inexpensive materials to keep costs low
reinvesting profits to continually design and produce better electric vehicles
According to the value chain analysis, which of the following is a support activity? - production and operations - supply chain management - marketing and sales - research and development
research and development
Which of the following real-world examples best supports the statement that strategic commitments to a specific industry may be the result of political rather than economic considerations? - A number of European governments created Airbus through direct subsidies to provide a countervailing power to Boeing. - Airbus and Boeing are likely to exit the aircraft manufacturing industry when industry profit potential falls to zero. - The traditional U.S. airlines Delta, United, and American Airlines have large fixed costs to maintain their network of routes that affords global coverage, frequently in conjunction with foreign partner airlines. - Given their strategic commitments, neither Delta nor United is likely to merge with other airlines.
A number of European governments created Airbus through direct subsidies to provide a countervailing power to Boeing.
Which of the following explains how dynamic capabilities are different from the resource-based view? - Dynamic capabilities deal with resource heterogeneity. - Dynamic capabilities deal with intangible resources. - Dynamic capabilities deal with tangible resources. - Dynamic capabilities deal with applying resources over time.
Dynamic capabilities deal with applying resources over time.
Which of the following statements is true of the Level-5 leadership pyramid? - Each level of leadership builds upon the previous one in the pyramid. - Successful companies are led by Level-1 executives. - At Level 3, managers are capable of devising a vision and mission to guide the firm toward superior performance. - Once a manager moves to higher levels, he or she loses the qualities acquired in the previous levels to gain new ones.
Each level of leadership builds upon the previous one in the pyramid.
EatNow is a fast-food restaurant that has recently entered the hospitality industry. Since most of its competitors are pursuing a low-cost position and doing well, EatNow also wants to adopt the same strategy. Which of the following will be a likely implication of this decision? - EatNow will face low-profit potential. - EatNow will be able to create higher value for its customers. - EatNow will be better placed to gain a competitive advantage in the industry. - EatNow will not face any direct competition in the industry.
EatNow will face low profit potential.
Ez Solutions Inc. has been operating in the country of Jamtland for almost a decade. The nation is currently experiencing an economic downturn. Which of the following is the most likely benefit of this economic condition for Ez Solutions Inc.? - Ez Solutions Inc. will have better access to highly skilled human capital at a lower cost. - Ez Solutions Inc. will have to expand its operations to meet the increasing consumer demand. - Ez Solutions Inc. will experience less competition from rival companies. - Ez Solutions Inc. will find it easier to raise prices to increase profits.
Ez Solutions Inc. will have better access to highly skilled human capital at a lower cost.
Which of the following statements best supports the fact that even during a period of low demand in the U.S. automotive industry, excess capacity remained? - Suppliers in the automotive industry had low bargaining power. - Other American automakers of plug-in hybrid sports cars, like Fisker Automotive, filed for bankruptcy. - Complementary products and services like battery charging and service stations were pervasive. - GM and Chrysler, despite their bankruptcy, restructured instead of exiting the industry.
GM and Chrysler, despite their bankruptcy, restructured instead of exiting the industry.
Which of the following is a feature of a fragmented industry? - It tends to generate high profitability. - It consists of many small firms. - It allows firms to set prices. - One large firm dominates the industry.
It consists of many small firms.
Too Fast Inc., a motorcycle company, is the market leader due to its superior engine technology and service orientation. These unique qualities have helped the company generate revenues that are consistently higher than other firms in the same industry. Which of the following can be concluded about Too Fast Inc. from this scenario? - It has a direct investment in other firms. - it has a competitive advantage over the firms - it has an exchange relationship with the other firms - it has a competitive parity with the other firms
It has a competitive advantage over the other firms.
Which of the following statements is true of an oligopoly? - Price-competition is the preferred mode of competition. - It is often analyzed using game theory. - Competing firms are most often independent of one another. - It is characterized by low entry barriers.
It is often analyzed using game theory.
Which of the following is a disadvantage of the balanced scorecard approach to measure firm performance? - It fails to allow managers and executives to find a balance between financial and strategic goals. - It only relies on an internal view of the firm, ignoring the external view. - It fails to allow managers to align their different perspectives to create a more focused corporation overall. - It provides only limited guidance about which performance metrics to choose.
It provides only limited guidance about which performance metrics to choose.
_________ are industry-specific factors that separate one strategic group from another. - mobility barriers - competitive differences - complementary products/services - barriers to entry
Mobility barriers
Though the microwaves manufactured by Nuked Inc. and Hot Box Inc. sell at the same price of $600 per unit, the economic value created by Nuked Inc. is more than that of Hot Box Inc. In the context of this scenario, which of the following statements is true? - Nuked and Hot Box Inc. have achieved a competitive parity. - Hot Box Inc. has differentiated its products more than Nuked Inc. has. - Nuked has a relative cost advantage over Hot Box Inc.. - Hot Box Inc. has been able to create more producer surplus for itself than Hot Box Inc.
Nuked has a relative cost advantage over Hot Box Inc..
________ is best described as executives' use of power and influence to direct the activities of others when pursuing organizational competitive advantage. - intrapreneurship - venture capitalism - strategic leadership - machiavellianism
Strategic leadership
When the Alta Velocidad Española (AVE) was completed, it impacted Spain's local airline industry. Which of the following statements about the five forces does this reflect? - Substitutes were not readily available because customers cannot use other means of transport. - Substitutes made it difficult for generating a profit potential in Spain's airline industry. - The combination of the competitive forces leads to collusion among existing airlines. - Entry barriers in Spain's airline industry are relatively high because of the high costs involved.
Substitutes made it difficult for generating a profit potential in Spain's airline industry.
If a company chooses to keep its vision customer-oriented rather than product-oriented, what will be the implication of that decision? - The company will tend to be more flexible when adapting to changing environments. - The company will clearly define how it means to satisfy a customer need. - The company will fail to establish a positive relationship between its vision statement and performance. - The company will have a short-term, unidirectional focus.
The company will tend to be more flexible when adapting to changing environments.
Which of the following statements will effectively guide a strategist? - It is necessary to isolate the key stakeholders and their needs when formulating a strategy. - Industry and firm effects that determine firm performance are independent of each other. - Strategy is all about competitive benchmarking and operational effectiveness. - The principles of strategic management can be applied universally to all organizations.
The principles of strategic management can be applied universally to all organizations.
Which of the following statements is true of customer-oriented visions? - They tend to force managers to take a myopic view of the business environment. - They define a business in terms of providing solutions to people's needs. - They are inflexible with regard to adapting to changing environments. - They state an organization's goals in terms of a good or service provided to customers.
They define a business in terms of providing solutions to people's needs.
Why are black swan events such as accounting scandals and the global financial crisis perceived as caused by cheap credit and subprime mortgages offered by financial institutions, bad for business? -They allow companies to gain a competitive advantage unfairly. - They erode the implicit trust between the corporate world and society. - They contribute to competitive parity, which hinders economic growth. - They foster a false sense of prosperity, which results in an economic depression.
They erode the implicit trust between the corporate world and society.
How do complements affect a primary product or service? - They reduce the value of the primary product. - They act as the strategic equivalent of the primary product. - They increase the demand for the primary product. - They lower the utility of the primary product.
They increase the demand for the primary product.
Organizational core values are the answer to which of the following questions? - What commitments do we make to act both legally and ethically? - Which of the value chain activities are primary? - What is the value added to a good or service at each step in the production? - What is the company's customer lifetime value?
What commitments do we make to act both legally and ethically?
When using the balanced scorecard approach to assess a firm's performance, which of the following is not a key question that managers need to answer? - how do customers view us? - how do we create value? - what intangible assets do we need? - how do shareholders view us?
What intangible assets do we need?
Which of the following statements related to a firm's stakeholders is not true? - While external stakeholders are those who make contributions toward the firm, internal stakeholders are those who reap all the benefits. - If internal or external stakeholders withhold participation in the firm's exchange relationships, it can have severe negative performance implications. - A firm's stakeholders include organizations and groups along with individuals who can affect or be affected by the firm's actions. - Effective stakeholder management is an example of how managers can act to enhance a firm's competitive advantage.
While external stakeholders are those who make contributions toward the firm, internal stakeholders are those who reap all the benefits.
In which of the following cases was a company at a major competitive disadvantage? - Facebook hired Sheryl Sandberg because Mark Zuckerberg, Facebook's founder, lacked important business skills. - Without a clear strategic position, Sears tried to be too many things for too many types of customers. - Sam's Club decided to prescreen its customers via required membership to establish creditworthiness. - Strategy executives at UPS used scenario planning to identify issues critical to shaping the firm's future.
Without a clear strategic position, Sears tried to be too many things for too many types of customers.
The tenet behind the triple bottom line is that - a firm should solely focus on increasing the economic value created for its customers. - a firm's primary objective should be increasing the total returns to its shareholders. - a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy. - a firm's return on revenue can be broken down into three ratios: COGS/Revenue, R&D/Revenue, and SG&A/Revenue.
a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy.
If a firm is not effectively organized to exploit the competitive potential of a valuable, rare, and costly to imitate (VRI) resource, the best case scenario is - a temporary competitive advantage. - a state of perfect competition. - strategic equivalence. - direct imitation.
a temporary competitive advantage.
Generally speaking, which of these situations is likely to lead to greater profits? - an industry that is about to undergo deregulation - a situation that encourages operating at excess capacity - a fragmented industry rather than a consolidated one - an industry with fewer but larger competitors
an industry with fewer but larger competitors
A diagnosis of the competitive challenge, an element of a good strategy, is primarily accomplished through strategy - implementation - formulation - analysis - control
analysis
In the dynamic capabilities perspective, for an asset or a capability to be included in a firm's resource stock, it should be - readily available for purchase using cash. - commonly shared by other firms in the same industry. - built through investments over time. - capable of reducing the barriers to entry in an industry.
built through investments over time.
How has Walmart staked out a unique strategic position? - by paying high wages to attract the most talented employees - by providing excellent customer service in a luxury setting - by cutting costs to offer lower prices than competitors - by investing 100% of profits in community development programs
by cutting costs to offer lower prices than competitors
Strategic-group mapping establishes that - competitive pressures within an industry are similar among all strategic groups. - competitive rivalry is strongest between firms that are within the same strategic group. - product features and prices are irrelevant to a strategic group. - rivals inside a strategic group serve different customers.
competitive rivalry is strongest between firms that are within the same strategic group.
Some scholars have added a sixth force to Porter's Five Forces model. This sixth force, ________, is believed to add value to the original product offering (or service) when the two are used in tandem. - complement - value chain - mobility barrier - technological factor
complement
William estimated that a pair of Perfect Fit jeans would be worth $60 for its brand and durability. However, at the Perfect Fit store, the pair of jeans he wanted was available for $45. The difference of $15 in this scenario is referred to as the - consumer surplus - reservation price - producer surplus - break-even price
consumer surplus.
According to the Level-5 leadership pyramid, the Level 2 manager is a(n) - strategic leader - competent manager - contributing team member - effective leader
contributing team member.
In the context of the SWOT matrix, which of the following best exemplifies an external opportunity for a firm? - increasing productivity of the employees - decreasing employee attrition within the firm - decreasing government interference in the target market - increasing inflation rates in the target market
decreasing government interference in the target market
The idea that all available information about a firm's past, current state, and expected future performance is embedded in the market price of the firm's stock is called the - time compression economies. - upper-echelons theory. - price-demand function - efficient-market hypothesis
efficient-market hypothesis.
Which of these is a way to reconfigure a value chain? - thinking about new combinations of resources and capabilities that a firm already possesses, such as repurposing a movie theater as a location for off-site corporate meetings - creating a partnership through strategic alliances, such as a bakery partnering with a restaurant - preparing to leave an industry rather than supply unreliable or substandard products to customers - entering an industry by offering sporting events on streaming video when competitors are offering them through cable hookups
entering an industry by offering sporting events on streaming video when competitors are offering them through cable hookups
The metaphor of a black swan best applies to - small businesses that become successful enough to raise capital through initial public offering. - events that are considered highly unexpected and highly impactful when they do occur. - highly profitable business units in low growth markets that are to be sustained solely for revenue generation. - low profitable strategic business units within a large enterprise that are best divested or liquidated.
events that are considered highly unexpected and highly impactful when they do occur.
Which of the following is a philanthropic responsibility of a firm? - not infringing on other firms' patents - providing products at appropriate prices - exhibiting corporate citizenship - obeying government regulations
exhibiting corporate citizenship
The relative bargaining power of suppliers is most likely low when - the suppliers provide products that are differentiated. - incumbent firms face low switching costs when changing suppliers. - there are no readily available substitutes for the products and services they offer. - the suppliers' industry is more concentrated than the industry it sells to.
incumbent firms face low switching costs when changing suppliers.
ABC Hardrives Inc., All Digital Inc., and FastFax Corp. are all companies that manufacture and sell consumer electronics. They procure their component parts from a similar set of suppliers in China and sell the final product to customers with similar needs. Thus, the three companies together are a part of a(n) - plant - focus group - industry - occupational group
industry
Patents, designs, copyrights, trademarks, and trade secrets are five forms of - intellectual property - social complexity - casual ambiguity - path dependence
intellectual property
A firm's ________ strategy is likely to fall by the wayside because of unpredictable events and turn into unrealized strategy. - recognized - realized - dominant - intended
intended
The amount that savers are paid for use of their money and the amount that borrowers pay for that use is best described as a(n) - interest rate - service tax - royalty fee - surcharge
interest rate
One major limitation of using shareholder value appreciation as a measure for assessing competitive advantage is that stock prices often times reflect the irrational and psychological mood and behaviors of investors. Alan Greenspan, former head of the Federal Reserve referred to this as - efficient-market hypothesis - economic value creation - satisficing - irrational exuberance
irrational exuberance.
Which of the following is a stakeholder attribute that managers should consider at every step in a stakeholder impact analysis? - legitimacy - supremacy - literacy - solvency
legitimacy
Stan has been recently promoted to the position of a team lead at an insurance company. This promotion was based on his boss's assessment that Stan is capable of conveying the company's vision and mission to groups. As a result, he can guide groups to superior performance. From this scenario, we can say that Stan is currently at __________ of the Level-5 leadership pyramid. - level 1 - level 3 - level 4 - level 5
level 4
According to the upper-echelons theory, - top managers of a company should isolate themselves from the organizational values. - organizational outcomes reflect the values of the top management team. - strong strategic leadership is solely the result of learning. - strategic commitments made by upper-level managers are inexpensive and short-term.
organizational outcomes reflect the values of the top management team.
Even though Easy Speak Inc. and KM Com Inc. operate in the same industry—telecommunications—each firm has a different and loyal customer base. While Easy Speak Inc. attracts young students and professionals through its efficient network coverage and pricing, KM Com Inc. attracts elderly customers solely due to its excellent customer service. Thus, both firms draw their strengths from distinct resource bundles. Which of the following assumptions of the resource-based model of competitive advantage does this scenario best illustrate? - resource imitation - resource mobility - resource substitution - resource heterogeneity
resource heterogeneity
The annual net profit after taxes for Tele Corp., a multinational conglomerate, is $5.5 billion. As legal owners, which of the following stakeholder groups has the most legitimate claim on this profit? - managers - shareholders - local communities - government
shareholders
Which of the following is an example of a firm's capabilities? - routine activities performed in the firm, like physical delivery of products - specific tasks involved in the invoicing of customers - assets such as plant and machinery owned by the firm - skills involved in training and managing a workforce
skills involved in training and managing a workforce
________ is an important tool because it allows a manager to recognize, prioritize and address the needs of various stakeholders. - Stockholder appreciation - Shareholder voting proxies - Stakeholder impact analysis - Shareholder Right's Plan
stakeholder impact analysis.
Within the context of strategic management it is important to understand that black swan events in the past have demonstrated that - stakeholders can affect or be affected by a firm's actions. - capitalism as an economic system is highly reliable. - companies can successfully integrate cost-leadership and differentiation strategies. - globalization has reduced the need for standardized corporate ethics.
stakeholders can affect or be affected by a firm's actions.
One major limitation of using accounting profitability as a measure for competitive advantage is its focus on ________ versus ________. - tangible assets; intangible assets - resources; capabilities - business strategy; corporate strategy - ROIC; Net Profit
tangible assets; intangible assets
The auditor of a public company is assessing the value of all the intangible assets owned by the company. Which of the following would most likely be included in this assessment? - the company's headquarters - the company's brand equity - the company's cash reserves - the company's plant and equipment
the company's brand equity
Which of the following actions of an automobile firm will be considered as a strategic commitment? - the firm launching an existing model of a car in red as a limited edition for six months - the firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future - the firm spending $100,000 on renting a manufacturing facility to meet the temporary demand for its cars - the firm promoting its new model of coupe through a free European trip worth $15,000 to be won as an early-bird offer
the firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future
When a firm integrates the competitive strategies of cost-leadership and differentiation, it will most likely result in - competitive advantage through superior performance. - trade-offs that work against each other. - an increase in the firm's economic contribution. - competitive parity with firms that have adopted either of the strategies.
trade-offs that work against each other.
Which of the following is not one of the VRIO characteristics of competitive advantage? - variable - rare - costly to imitate - organized to capture value
variable
A company's vision primarily states - how the company plans to accomplish its goals. - what the company actually does to generate revenues. - what the company wants to ultimately accomplish. - how the company plans to compete in its industry.
what the company wants to ultimately accomplish.