MGMT 425 Exam 2

What is social entrepreneurship?

The pursuit of social goals while creating a profitable business.

According to the text, which of the following companies "lost 75 percent of its market value between 2003 and 2005"? a. IKEA b. Blockbuster c. Netflix d. Amazon e. Disney f. None of the above

b. Blockbuster

Which of the following companies used a disruptive innovation? a. Disney b. GE Healthcare c. Amazon d. IKEA e. All of the above f. None of the above

b. GE Healthcare

Which type of innovation did Netflix use? a. Radical innovation b. Architectural innovation c. Disruptive innovation d. incremental innovation e. All of the above f. None of the above

c. Disruptive innovation

Which type of strategic alliance is Disney currently using the most? a. Short-term contracts b. Licensing c. Franchising d. Equity alliances e. Joint ventures f. All of the above

c. Franchising

Which of the following companies "had more than 60 million subscribers worldwide" in 2015? a. Amazon b. IKEA c. Netflix d. Walmart e. Target f. None of the above

c. Netflix

Which company sells "the world's lowest-priced car?" a. Tesla b. GM c. Nissan d. Tata e. Elio f. None of the above

d. Tata

What is a joint venture?

A stand-alone organization created and jointly owned by two or more parent companies.

What is a differentiation strategy?

A generic business plan that seeks to create higher value for customers than the value that competitors create.

_______________ refers to the decisions that senior management makes and the goal-directed action it takes to gain an sustain competitive advantage in several industries and markets simultaneously.

Corporate strategy

What does "economies of scale" refer to?

Decrease in cost per unit as output increases

______________________ refers to savings that come from producing two (or more) outputs at less cost than producing each output individually despite using the same resources and technology.

Economies of scope

A(n) __________________ refers to the transformation of an idea into a new product or process, or the modification and recombination of existing ones.

Invention

Which company bough Cadbury through a hostile takeover?

Kraft Foods

_____________ refers to the knowledge that cannot be codified; concerns knowing how to do a certain task and can be acquired only through active participation in that task.

Tacit knowledge

What is national competitive advantage?

World leadership in specific industries

Which of the following is "the largest online retailer worldwide"? a. Amazon b. IKEA c. Walmart d. Google e. Alibaba f. None of the above

a. Amazon

JetBlue "copied and improved upon" many of which airline's cost-reducing activities? a. Southwest b. American c. Ryan Air d. United e. Delta f. None of the above

a. Southwest

Which company surpassed $200 billion market capitalization last year? a. Disney b. IKEA c. Netflix d. GE Healthcare e. Amazon f. None of the above

e. Amazon

Which of the following type of innovation refers to new ways to produce exiting products or deliver existing services? a. Radical innovation b. Architectural innovation c. Disruptive innovation d. Incremental innovation e. Process innovation f. Product innovation g. None of the above

e. Process innovation

Which company failed in their attempt to establish business in Germany? a. Amazon b. Tata c. GE Healthcare d. Tesla e. Walmart f. None of the above

e. Walmart

Which of the following is "one of the five largest technology companies in the world"? a. Apple b. Microsoft c. Amazon d. Google e. Facebook f. All of the above g. None of the above

f. All of the above

Crossing-the-Chasm Framework

• Conceptual model that shows how each stage of the industry life cycle is dominated by a different customer group. • many innovators are unable to successfully transition from one stage of the industry life cycle to the next. •the significant differences between the early customer groups—who enter dur- ing the introductory stage of the industry life cycle—and later customers—who enter during the growth stage—can make for a difficult transition between the different parts of the industry life cycle. Such differences between customer groups lead to a big gulf or chasm into which companies and their innovations frequently fall.

Build-Borrow-or-Buy Framework

• a conceptual model that aids strategists in deciding whether to pursue internal development ( build ), enter a contract arrangement or strategic alliance ( borrow ), or acquire new resources, capabilities, and competencies ( buy ). • Firms that are able to learn how to select the right pathways to obtain new resources are more likely to gain and sustain a competitive advantage.

Five business strategies

• differentiation strategy - Generic business strategy that seeks to create higher value for customers than the value that competitors create. • cost-leadership strategy - Generic business strategy that seeks to create the same or similar value for customers at a lower cost. • focused cost- leadership strategy - Same as the cost- leadership strategy except with a narrow focus on a niche market. • focused differentiation strategy - Same as the differentiation strategy except with a narrow focus on a niche market. Focused cost-leadership strategy and focused differentiation strategy—are essentially the same as the broad generic strategies except that the competitive scope is narrower. • blue ocean strategy - Business-level strategy that successfully combines differentiation and cost-leadership activities using value innovation to reconcile the inherent trade-offs.

Porter's Diamond of National Competitive Advantage

• explains national competitive advantage—why are some nations outperforming others in specific industries. • it consists of four interrelated factors: ■ Factor conditions - describe a country's endowments in terms of natural, human, and other resources. ■ Demand conditions - are the specific characteristics of demand in a firm's domestic market. ■ Competitive intensity in focal industry - companies that face a highly competitive environment at home tend to outperform global competitors that lack such intense domestic competition. ■ Related and supporting industries/complementors -The availability of top-notch complementors further strengthens national competitive advantage.

Four types of innovation

• incremental innovation squarely builds on an established knowledge base and steadily improves an existing product or service offering. It targets existing markets using existing technology. • radical innovation draws on novel methods or materials, is derived either from an entirely different knowledge base or from a recombination of existing knowledge bases with a new stream of knowledge. It targets new markets by using new technologies. • architectural innovation is a new product in which known components, based on existing technologies, are reconfigured to create new markets. • disruptive innovation leverages new technologies to attack existing markets. It invades an existing market from the bottom up. MARKETS Existing New Existing incremental Architectural Innovation Innovation New Disruptive Radical Innovation Innovation TECHNOLOGIES