MGMT 464 Honoree Exam 2 this one

A(n) ________ is a​ cross-functional integration and coordination of​ capabilities; whereas a​ ________ consists of business processes and routines that manage the interaction among resources to turn inputs into outputs

Competency; Capability

CAD/CAM

Computer-Assisted Design and Computer-Assisted Manufacturing. Means that learning times are shorter and products can be economically manufactured in small customized batches in a process called mass customization

Differentiation Focus

Concentrates on a particular buyer group, product line segment, or geographic market. Examples: Nickelodeon, Morgan Motor Car Company Valued by those who believe that a company or a unit that focuses its efforts is better able to serve the special needs of narrow strategic target more effectively than competitors

A(n) ________ competency is a collection of competencies that crosses divisional​ boundaries, is widespread within the​ corporation, and is something that the corporation can do exceedingly​ well; whereas​ ________ competency exists when competencies are superior to the competencies of a competitor

Core; Distinctive

Difference between Cost Leadership (and Differentiation) and Cost Focus (and Differentiation Focus)

When aimed for a broad mass-market, its called a Cost Leadership (or Differentiation). When focused on a market niche (narrow target) its called a Cost Focus (or Differentiation Focus)

Strategic managers can use​ ________ because it forces suppliers to constantly compete for the business of important buyers

Multiple Sourcing

Differentiation Strategy

New firms must develop their own distinctive competence to differentiate their products/services in some way in order to compete successfully. Examples of companies that use this are: Walt Disney Company, BMW, Apple. (More likely to generate higher profits)

Bankruptcy

Occurs when an organization forfeits control of the organization to a court in return for a predetermined​ settlement

A Merger

Occurs when two organizations exchange stock to create one new organization in the marketplace

In a​ ________, a senior manager can view each individual product line and business unit as a series of investments in an organization

Portfolio Analysis

Corporate Strategy

Primarily about the choice of direction for a firm as a whole and the management of its business or product portfolio

Secondary Activities

Procurement (purchasing), technology development (R&D), human resource management, and firm infrastructure (accounting, finance, strategic planning), ensure that the primary value-chain activities operate effectively and efficiently

Multiple Sourcing Strategy

Purchasing strategies that a strategic manager at a company uses when he or she orders a particular part from several​ vendors

Retrenchment Strategies

Reduce the company's level of activities Categories: Turnaround, Captive Company, Sell-Out/Divestment, Bankruptcy/Liquidation

A​ ________ is an​ organization's assets and it is considered the basic building blocks of an​ organization; whereas​ a(n) ________ refers to a​ corporation's ability to exploit its resources

Resource; Capability

Economies of Scope

Result of when the value chains of two separate products/services share activities, such as the same marketing channels or manufacturing facilities. (The cost of joint production of multiple products can be lower than the cost of separate production)

A new product pioneer can use​ ________ to create an opportunity to​ "skim the​ cream" from the top of the demand curve with high prices

Skim Pricing

A strategic manager who implements​ ________ employs the​ just-in-time (JIT) concept that has a concept of parts that are purchased arrive at the plant just when the manager needs them rather than an excess of inventories at the organization

Sole Sourcing

​________ reduces transaction costs and builds quality because the purchaser and supplier work together as​ partners; whereas in​ a(n) ________, two suppliers are the sole suppliers of two different parts

Sole Sourcing; Parallel Sourcing

Cooperative Strategies

Strategies that involve working with other firms to gain competitive advantage within an industry. (Two types: Collusion and Strategic Alliances)

Turnaround Strategy

Strategy used to emphasize and improve the operations in an​ organization, and it is an appropriate strategy when problems are pervasive but not yet​ critical

SWOT is an acronym for:

Strengths, Weaknesses, Opportunities, Threats

Experience Curve

Suggests that unit production costs decline by some fixed percentage(commonly 20-30%) each time the total accumulated volume of production in units doubles (Originally called Learning Curve)

When there is no direct communication among competing firms in the​ marketplace, collusion can also be​ a(n) ________

Tacit

Competitive Scope

Term a strategic manager refers to as the breadth of the​ company's or business​ unit's target​ market

Cost Leadership

The ability of a company or a business unit to design, produce, and market a comparable product or service more efficiently than its competitors. It's a lower-cost competitive strategy that aims at the broad mass market and requires 'aggressive construction of efficient-scale facilities, vigorous pursuit of cost reduction from experience, tight cost and overhead control, avoidance of marginal customer accounts, and cost minimization in areas like R&D, service, sales force, advertising, and so on'.

Focus

The ability of a company to provide unique and superior value to a particular buyer group, segment of the market line, or geographic market

Transferability

The ability of competitors to gather the resources and capabilities necessary to support a competitive challenge

Replicability

The ability of competitors to use duplicated resources and capabilities to imitate the other firm's success

Collusion

The active cooperation of firms within an industry to reduce output and raise prices in order to get around the normal economic law of supply and demand.

Functional Strategy

The approach a functional area takes to achieve corporate and business unit objectives and strategies by maximizing resource productivity

Corporate Culture

The collection of beliefs, expectations, and values learned and shared by a corporation's members and transmitted from one generation of employees to another

Vertical Integration

The degree to which a firm operate vertically in multiple locations on an industry's value chain from extracting raw materials to manufacturing to retailing. (Can reduce costs, guarantee access to key materials, or guarantee distribution)

Cultural Intensity

The degree to which members of a unit accept the norms, values, or other cultural content associated with the unit

Cultural Integration

The extent to which units throughout an organization share a common culture

Directional Strategy

The firm's overall orientation toward growth, stability, or retrenchment

Operating Leverage

The impact of a specific change in sales volume on net operating income

Portfolio Analysis

The industries or markets in which firm competes through its products and business units

Parenting Strategy

The manner in which management coordinates activities, transfers resources, and cultivates capabilities among product lines and business units

Growth Strategy

The orientation in a corporate directional strategy that expands the​ company's activities in an organization

Offshoring

The outsourcing of an activity or a function to a wholly owned company or an independent provider in another country

Center of Gravity

The part of the chain where the company;s greatest expertise and capabilities lie-its core competencies

Technology Transfer

The process of taking a new technology from the laboratory to the marketplace

Financial Leverage

The ratio of total debt to total assets (Helpful in describing how debt is used to increase earnings available to common shareholders)

VRIO Framework

The resource-based framework that focuses on the Value (V), Rarity (R), Imitability (I), and Organizational (O) aspects of resources and capabilities.

Consolidation

The second phase of a turnaround strategy that implements a program to stabilize the​ now-leaner organization

Transparency

The speed with which other firms can understand the relationship of resources and capabilities supporting a successful firm's strategy

Upstream

(In petroleum industry) Oil exploration, drilling, and moving the crude oil to the refinery

Downstream

(In petroleum industry) Refining the oil plus transporting and marketing gasoline and refined oil to distributors and gas station retailers

Outsourcing Strategy

A​ labor-cost reduction strategy an organization can use to purchase resources from outsiders through​ long-term contracts instead of producing the resources in​ house

Concentration

A corporate growth strategy that concentrates a corporation's resources on competing in one industry

Diversification

A corporate growth strategy that expands product lines by moving into another industry

Differentiation

A generic strategy that gives a company the ability to provide a unique and superior value to the buyer in terms of product​ quality, special​ features, or​ after-sales service

Product Life Cycle

A graph showing time plotted against the sales of a product as it moves from introduction through growth and maturity to decline

Value Chain

A linked set of value-creating activities that begin with basic raw materials coming from suppliers, moving on to a series of value-added activities involved in producing and marketing a product/service

Cost Focus

A low-cost competitive strategy that focuses on a particular buyer group or geographical market and attempts to serve only this niche, to the exclusion of others

Mutual Service Consortium

A partnership of similar companies in similar industries that pool their resources to gain a benefit that is too expensive to develop alone, such as access to advanced technology

Tactics

A short-term operating plan detailing how a strategy is to be implemented

Lower-Cost Strategy

A strategy in which a company or business unit designs, produces, and markets a comparable product more efficiently than its competitors. More likely to generate increases in market share

Value-Chain Partnership

A strong and close alliance in which one company or unit forms a long-term arrangement with a key supplier or distributor for mutual advantage

Common Thread

A unifying theme for the whole organization to rally around and provide focus for organizational efforts

Strategic Window

A unique market opportunity that is available only for a particular time

Which of the following statements is NOT true about a business​ strategy A. A strategic manager uses a business strategy to reduce the impact on overall company performance. B. The business strategy can answer the question about how the company or its units should compete or cooperate in each industry. C. A good strategic manager uses a business strategy to focus on how the strategic manager can improve the competitive position of a​ company's or business​ unit's products or services in a specific industry. D. A good strategic manager can use the business strategy as a competitive tool to battle against competitors in the marketplace to gain a competitive advantage and retain more consumers in the marketplace. E. A good strategic manager can use the business strategy as a cooperative tool to work with one or more companies in the marketplace to gain a competitive advantage against other organizations that compete in the marketplace.

A. A strategic manager uses a business strategy to reduce the impact on overall company performance.

All of the following are true statements about distinctive competencies EXCEPT A. a key strength is always a distinctive competency at a firm B. Apple is well known for its functional design ability- the iPod and iPad are examples o distinctive competencies at the firm. C. a core competency that is superior to a competitor's core competency is called a "distinctive competency" D. General Electric is well known for its distinctive competency in management development E. a distinctive competency is sought by managers because a distinctive competency can give a firm a competitive advantage in the marketplace

A. a key strength is always a distinctive competency at a firm

All of the following errors are examples of outsourcing errors that a strategic manager strives to avoid when an outsourcing strategy is an optimum solution EXCEPT​ ________ A. an error occurs in an outsourcing strategy when a strategic manager plans a viable exit strategy B. an error occurs in an outsourcing strategy when a strategic manager fails to keep core activities​ in-house C. qualified managers fail to manage the outsourced activity in the marketplace D. the vendor was not trustworthy or the vendor lacks​ state-of-the-art processes E. companies failed to establish a balance of power in the relationship

A. an error occurs in an outsourcing strategy when a strategic manager plans a viable exit strategy

Licensing Arrangement

An agreement in which the licensing firm grants rights to another firm in another country or market to produce and/or sell a product

Liquidation

An alternative to a bankruptcy​ strategy, and an organization seeks to terminate the business operations in an organization and distribute the cash out of the assets it sells to its​ shareholders

Captive Company Strategy

An organization uses when the organization forfeits its independence in exchange for​ security. (Captive Company: Does most of its business with contracted firm and is formally tied to the other company through a long-term contract)

Backward Integration

Assuming a function previously provided by a supplier (going backward on an industry's value chain)

All of the following are true about competitive strategies EXCEPT​ ________ A. a strategic manager can use a differentiation strategy to provide unique and superior product that can add value to the consumer B. a strategic manager uses a cost leadership and differentiation competitive strategy focuses on a market niche or narrow target market in an industry C. a strategic manager can use the cost leadership competitive strategy to​ design, produce, and market a comparable product that is more efficient compared to a​ competitor's product D. a strategic manager can use the EFAS Table and the IFAS Table to scan the​ company's internal and external environment E. the three competitive strategies that Michael Porter proposed to outperform other companies in a specific industry include overall cost​ leadership, differentiation, and focus

B. a strategic manager uses a cost leadership and differentiation competitive strategy focuses on a market niche or narrow target market in an industry

All of the following are a category type in the BCG​ Growth-Share Matrix EXCEPT​ ________ A. question marks B. exclamation marks C. cash cows D. stars E. dog

B. exclamation marks

All of the following are true statements about leveraged buyout​ (LBO) EXCEPT​ ________ A. the debt is paid with money generated from the acquired​ company's operations or by sales of its assets B. financial performance of a typical leveraged buyout​ (LBO) usually rises above the industry average in the fourth year after the leveraged buyout​ (LBO) C. the huge amount of debt on the acquired company books might actually cause its eventual decline by focusing​ management's attention on​ short-term matters D. management of the leveraged buyout​ (LBO) is under tremendous pressure to keep the highly leveraged company profitable E. the acquired company pays for its own acquisition

B. financial performance of a typical leveraged buyout​ (LBO) usually rises above the industry average in the fourth year after the leveraged buyout​ (LBO)

All of the following are true about the disadvantages to a strategic manager who pursues a joint venture EXCEPT​ ________ A. probability of conflict with partners B. unpopular in international markets because of the financial and​ political-legal constraints C. lower profits compared to other firms D. loss of control in industry E. likely transfer of technological transfers to partner

B. unpopular in international markets because of the financial and​ political-legal constraints

The strategic manager can use a​ ________ to focus on improving the competitive position of a​ company's or business​ unit's products or services within the specific industry or market segment that the company or business unit serves

Business Strategy

​A(n) ________ model is a​ company's method for making money in the current business​ environment; whereas a strategic manager can use​ a(n) ________ model when he or she waits until a product becomes standardized and then enters the market with a​ low-priced, low-margin product that appeals to the mass market

Business; Efficiency

Which of the following is NOT an advantage of portfolio​ analysis A. Portfolio analysis can determine whether the organization has​ cash-flow availability to use in expansion and growth scenarios. B. Portfolio analysis contains a graphic depiction that facilitates communication. C. Portfolio analysis does not have real limitations that cause companies to reduce their use of this approach in the marketplace. D. Portfolio analysis encourages top managers to evaluate each of the​ organization's business units on an individual basis. E. Portfolio analysis simulates the use of externally oriented data to supplement​ management's judgment in a scenario

C. Portfolio analysis does not have real limitations that cause companies to reduce their use of this approach in the marketplace.

All of the following statements are correct about a propitious niche EXCEPT​ ________ A. a niche is propitious to the extent that it currently is just large enough for one firm to satisfy its demand B. after a firm has found and filled that​ niche, it is not worth a potential​ competitors' time or money to also go after the same niche C. a good strategic manager always avoids a propitious niche D. a propitious niche is also known as a​ "strategic sweet​ spot" E. a propitious niche is a favorable niche that is well suited to the​ firm's internal and external environment

C. a good strategic manager always avoids a propitious niche

All of the following are true statements about an​ organization's mission and objectives EXCEPT​ ________ A. a strategic manager can reveal that the​ company's objectives are inappropriately stated compared to the current operational goals and objectives B. a strategic manager can encounter a problem in performance from an inappropriate mission statement that is too narrow or too broad C. a good strategic manager ignores the action possibilities when the strategic manager concentrates on the​ organization's mission and objectives in strategy formulation D. a strategic manager reexamines an​ organization's current mission and objectives before alternative strategies can be generated and evaluated E. it is much easier for a strategic manager to deal with alternative courses of action that exist right here and now than to really think about what you want to accomplish in the future

C. a good strategic manager ignores the action possibilities when the strategic manager concentrates on the​ organization's mission and objectives in strategy formulation

According to​ Barney, tacit collusion in an industry is most likely to be successful when each of the following occur EXCEPT​ ________ A. small number of identifiable competitors B. costs are similar among firms C. ​low-entry barrier D. common industry culture that accepts competition E. one firm tends to act as a price leader

C. ​low-entry barrier

A(n) ________ refers to a​ corporation's ability to exploit its​ resources; whereas a​ ________ capability is constantly being changed and reconfigured to make it more adaptive to an uncertain environment

Capability; Dynamic Capability

All of the following are correct statements about a joint venture EXCEPT​ ________ A. a disadvantage to a strategic manager who forms a joint venture is loss of control B. a joint venture is the most popular form of strategic alliance C. a joint venture is formed by two or more strategic partners to create an independent business entity D. a joint venture is never used in international undertakings in the marketplace E. a joint venture provides a way to temporarily combine the different strengths of partners to achieve an outcome that is considered valuable to all involved parties in the joint venture

D. a joint venture is never used in international undertakings in the marketplace

All of the following are true about strategic alliances EXCEPT​ ________ A. forming and managing a strategic alliance is a capability that strategic managers learn over time B. some alliances are short​ term, only lasting enough for one partner to become established in a new market C. over time conflicts over objectives and control develop among partners in strategic alliances D. a strategic alliance does not involve uncertainty because strategic managers implement strategic plans E. many alliances do increase profitability of the members and have a positive effect on firm value

D. a strategic alliance does not involve uncertainty because strategic managers implement strategic plans

All of the following are true about​ hyper-competitive markets EXCEPT​ ________ A. in a​ hyper-competitive market, a strategic manager raises entry barriers to limit the number of competitors in the marketplace B. ​hyper-competitive might lead to an​ over-emphasis on​ short-term tactics over a​ long-term strategy in the marketplace C. in a​ hyper-competitive market, a firm initially competes on cost and quality until there is an abundance of​ high-quality, low-priced goods in the marketplace D. as an industry becomes​ hyper-competitive, the firm can gain a sustainable competitive advantage in the marketplace E. a firm that exists in a​ hyper-competitive market experiences escalating stages of competition in the marketplace

D. as an industry becomes​ hyper-competitive, the firm can gain a sustainable competitive advantage in the marketplace

All the following are correct statements about sole sourcing EXCEPT​ ________ A. a strategic manager who implements a sole sourcing strategy experiences more companies that have longer relationships with fewer suppliers involved in a transaction B. sole sourcing reduces transaction costs and builds quality when the purchaser and supplier work together as partners rather than as adversaries C. the limitations of sole sourcing have led to the development of parallel sourcing D. sole​ sourcing, in​ practice, utilizes two different vendors to supply two particular products E. a limitation of sole sourcing occurs when a supplier is unable to deliver a part and the purchaser has no alternative but to delay production of a product

D. sole​ sourcing, in​ practice, utilizes two different vendors to supply two particular products

All of the following indicate that tacit collusion is a successful cooperative strategy EXCEPT​ ________ A. one firm tends to act as the price leader B. sales are characterized by a high frequency of small orders C. there is a common industry culture that accepts cooperation D. there is a large number of unidentifiable competitors E. costs are similar among firms

D. there is a large number of unidentifiable competitors

All of the following statements are true about quality of life and human diversity EXCEPT​ ________ A. there is an increase in racial diversity that leads to an increase in the performance in organizations in the United States B. strategic managers who redesign their plants and offices to improve energy efficiency improve the quality of work life and raise labor productivity in the workplace C. human resource managers are concerned with hiring and promoting individuals and groups without regard to ethnic background D. there is a trend in U.S. companies to decrease the percentage of minorities and women hired in the U.S. workforce E. good human resource managers work to ensure that individuals are treated fairly on the job and they ensure that employees are not harassed by prejudiced​ co-workers or managers

D. there is a trend in U.S. companies to decrease the percentage of minorities and women hired in the U.S. workforce

All of the following are true statements about growth strategies EXCEPT​ ________ A. growth strategies can enhance​ sales, assets, and profits in an organization B. growth is a popular strategy because larger businesses can survive longer compared to a smaller business because the larger businesses have an abundance of financial resources C. an organization that experiences growth can offer more opportunities for​ advancement, promotion, and unique or fun employment opportunities D. ​U.S.-based organizations always succeed when they implement horizontal growth strategies to enter international markets E. an organization that implements a growth strategy to increase sales takes advantage of the experience curve to increase profits and reduce the​ per-unit costs of products sold in the marketplace

D. ​U.S.-based organizations always succeed when they implement horizontal growth strategies to enter international markets

​D'Aveni's theory of​ hyper-competition is supported by research that addresses the importance of building​ ________ to help a strategic manager cope with uncertain markets

Dynamic Capabilities

In a​ hyper-competitive market, all of the following scenarios are a threat to the​ firm's market stability EXCEPT​ ________ A. frequent entry by unexpected outsiders B. new technology C. short product design cycle D. short product life cycle E. adding value to products and services

E. adding value to products and services

All of the following are true about logistics strategies EXCEPT​ ________ A. a strategic manager outsources logistics to reduce costs and improve delivery time B. a strategic manager can form centralized logistic groups that contain specialists in different transportation modes C. the trends related to a logistics strategy include​ centralization, outsourcing, and the use of the Internet D. to gain logistical synergies from business​ units, strategic managers at corporations began to centralize logistics in the headquarters group E. logistics strategy is the strategy employed to analyze corporate and​ business-level financial options in organizations that compete in the marketplace today

E. logistics strategy is the strategy employed to analyze corporate and​ business-level financial options in organizations that compete in the marketplace today

All of the following are true statements about outsourcing EXCEPT​ ________ A. outsourcing is becoming an increasingly important part of the strategic​ decision-making discussion. B. outsourcing is purchasing a product or service externally that had been previously provided internally. C. outsourcing is the reverse of vertical integration. D. there are many pros and cons to outsourcing with managers increasingly focusing on​ non-strategically critical parts of the business as categories for outsourcing. E. outsourcing is an activity or a function assigned to a wholly owned company or an independent provider in another country.

E. outsourcing is an activity or a function assigned to a wholly owned company or an independent provider in another country.

Growth Strategies

Expand the company's activities. Categories: Concentration (Vertical Growth, Horizontal Growth) Diversification (Concentric, Conglomerate)

​________ knowledge is knowledge that can be easily articulated and​ communicated; whereas​ ________ knowledge is knowledge that is not easily communicated because it is deeply rooted in employee experience or in a​ corporation's culture

Explicit; Tacit

​A(n) ________ strategy is a strategy to avoid that occurs when a strategic manager imitates the strategy of a competitor in the​ marketplace; whereas a strategic manager that implements​ ________ strategy achieves success when he or she pioneers a successful product and continues to search for another super product that will ensure the growth and prosperity in the organization

Follow the Leader; Hit Another Home Run

Vertical Growth

In which a firm takes over a function previously provided by a supplier or distributor

Economies of Scale

In which unit costs are reduced by making large numbers of each product are made

Primary Activities

Inbound logistics (raw material handling and warehousing), go through an operations process in which a product is manufactured, and continue on to outbound logistics (warehousing and distribution), to marketing and sales, and finally to service (installation, repair, and sale of parts)

Stars

Market leaders that are typically at or nearing the peak of their product life cycle in a BCG​ Growth-Share Matrix

Logistics Strategy

Used to gain a competitive advantage in the marketplace when he or she focuses on the flow of products into and out of the manufacturing process

Sell-out Strategy

Useful strategy when a manager can offer his or her shareholders competitive prices and the employees can keep their jobs when the organization sells itself to a competitor in the​ marketplace