MGMT 481 Quizzes Ch 1, 2, 3, 5

freemium

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

by cutting costs to offer lower prices than competitors

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

customer perspective is directly linked to a firm's revenue and profit

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.

Vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplish

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.

Executives interpret situations through the lens of their unique perspectives, shaped by personal circumstances, values, and experiences

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.

It is often analyzed using game theory.

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.

irrational exuberance

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.

differentiation

One of Howard Schultz's strategic initiatives after retaining the reins of Starbucks in 2008 was to shut the company's 7,000 stores for one day so baristas could relearn what makes the Starbucks brand unique. This initiative reflects a focus on which type of strategy? differentiation cost leadership blue ocean industry effect strategic tradeoff

goals to improve service.

Product-oriented vision statements provide managers with goals for employee development. goals to improve service. strategic flexibility. ways to solve customer problems.

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 his competitors but at a higher price Provide services that consumers will value more than those of its rivals Minimize the difference between value creation and cost involved

Provide services that consumers will value more than those of its rivals

The annual net profit after taxes for Tele Corp. a multi national 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

industry life cycle

Smartphone sales have stagnated in developed countries, but they continue to experience high growth in emerging economies. Which aspect of the industry does this trend reflect? first-mover disadvantage industry life cycle network effects cost leadership chasm framework

complement

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 together. complement value chain mobility barrier technological factor

4

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

intangible; tangible

Starbucks' adoption of social media and an app that focuses on customer satisfaction suggests that competitive advantage is more likely to spring from ________ resources than from ________ resources. equivalent; substitutable visible; rare intangible; tangible tangible; intangible costly; reputational

interest rate

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.

incumbent firms face low switching costs when changing suppliers

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

core competency.

The success of Starbucks lies in its ability to create for the customer a unique experience or "third place" between home and work. This unique experience is also known as Starbucks' path dependence. resource heterogeneity. value chain. core competency. tangible resources.

a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy.

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.

economic value creation

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

Nuked has a relative cost advantage over Hot Box Inc.

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.

technological and sociocultural

Using the PESTEL framework, which factors were the most powerful in influencing the failure of Blackberry? technological and sociocultural political and sociocultural sociocultural and economic political and ecological legal and technological

co-opetition

What term is used to describe cooperation by competitors who want to achieve a strategic objective? co-opetition strategic competition complementary assets strategic commitment

consumer surplus.

When Dollar Shave entered the market with razors and blades at $1 plus $2 shipping, which was far below existing razor prices, they were able to achieve a opportunity cost. consumer surplus. producer surplus. profit. reservation price.

consumer surplus.

When Gillette created the high-end, 6-blade razor, they exceeded market demands. Economic value created determines how much customers value a product. In this case, Gillette failed to achieve cost leadership. producer surplus. firm profit. cost advantage. consumer surplus.

Substitutes made it difficult for generating a profit potential in Spain's airline industry

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.

What intangible assets do we need?

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?

oligopoly

Which best describes the competitive industry structure in which Blackberry found itself? oligopoly monopoly natural monopoly monopolistic competition perfect competition

threat of new entrants

Which of Porter's five forces was likely the most powerful factor influencing the failure of Blackberry? threat of new entrants threat of suppliers rivalry among existing competitors threat of buyers threat of substitute products or services

what the company wants to ultimately accomplish.

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.

restrictive government policies are introduced in the industry.

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.

analysis

A diagnosis of the competitive challenge, an element of a good strategy, is primarily accomplished through strategy implementation formulation analysis control.

intended

A firm's ________ strategy is likely to fall by the wayside because of unpredictable events and turn into unrealized strategy. recognized realized dominant intended

firms reduce competition within the industry through mergers and acquisitions.

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.

value creation.

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.

organizational outcomes reflect the values of the top management team.

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.

the firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future

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

suppliers

Which of the following groups will not be considered a company's internal stakeholder? suppliers board members shareholders managers

Which of the following statements is true of strategy Statements of desires on their own or strategy Tactic tools that are a part of the firms functional and global initiatives are strategy Operational effectiveness and competitive benchmarking are strategy Action that allow a firm to address a competitive challenge are strategy

Action that allow a firm to address a competitive challenge are strategy

value driver

Apple developed iTunes as a complement to drive iPod sales. Which aspect of differentiation strategy does this move represent? competitive advantage value driver cost parity economic value economies of scope

rare

Between 2004 and 2008, Starbucks expanded operations rapidly and attempted to diversity from its core business. These efforts diluted its core culture, resulting in competitive parity because the customer experience that was its core competency was no longer tangible. organized to capture value. valuable. imitable. rare.

task environment

Blackberry's response to the introduction of the iPhone was described in the case. The threat of the iPhone came from which environment? general environment legal environment task environment political environment social environment

600

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

a competitive advantage

Despite one of its premium shavers, Gillette enjoyed a 75 percent share of the shaving market. That market share means that they likely possessed a competitive advantage. high efficiency. low cost of capital. a triple bottom line advantage. a balanced scorecard advantage.

reinvesting profits to continually design and produce better electric vehicles

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

It consists of many small firms.

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.

EatNow will face low profit potential

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.

incremental

Every September, Apple releases new versions of its iPhone, boasting improved functions—for example, wireless charging. Which type of innovation does this action reflect? incremental architectural radical and disruptive disruptive radical

Which of the following is a philanthropic responsibility of a firm Not in fringing on other firms patterns Providing products at appreciate it prices Exhibiting corporate citizenship Obeying government regulations

Exhibiting corporate citizenship

Accounting data can be easily transformed into financial ratios to help assess and evaluate the competitive performance of firms.

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.

It defines the means of how a customer need will be met.

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.

razor-razor-blade mode

Gillette invented the safety razor. When they decided to sell the safety razor at a low price then charge higher prices for replacement blades, they created a new business model called subscription model. fremium. bundling. pay as you go. razor-razor-blade model.

consumer surplus.

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.

stakeholders can affect or be affected by a firm's actions

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.

Competitive rivalry

____ 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