MGT 491 exam 1
Which of the following terms describes the guiding policy to address the competitive challenge, and uses corporate- and business-level strategy? analysis formulation implementation competitive advantage
formulation
The first step in stakeholder impact analysis involves formulating a stakeholder strategy to balance the different needs of various stakeholders. identifying the opportunities and threats the stakeholders present. describing the economic, legal, ethical, and philanthropic responsibilities of the firm toward society. identifying the stakeholders that currently have, or potentially can have, a material effect on a company.
identifying the stakeholders that currently have, or potentially can have, a material effect on a company.
Tommy wants to open his own food truck but doesn't know anything about business. He needs help determining who his competition is, how he should craft his strategy to compete and how he'll implement his strategy to achieve a competitive advantage. He's hired you to help him get started. As a result, you know that you will probably use the... AFI strategy framework. business model analysis. Six Sigma tool. Stakeholder Impact analysis.
AFI strategy framework.
Bill's Auto & Airplane Repair shop is able to generate a positive net income of $10,000 a week; this is the industry average. We can conclude that since he has a positive net income, he also has a competitive parity in the industry. Correct—competitive advantage is achieved through profitability alone. Correct—competitive advantage is achieved since Bill's Auto & Airplane Repair shop has a positive net income. Correct—competitive parity is achieved by generating average returns, relative to competition in a given industry. Incorrect—Bill's Auto & Airplane Repair shop more than likely has a sustained competitive advantage since his business is diversified.
Correct—competitive parity is achieved by generating average returns, relative to competition in a given industry.
How do low interest rates affect a business? Firms tend to defer investments until rates rise. Correct! Firms can easily borrow money to finance future growth. Consumer demand slows down. Business credit is harder to obtain.
Firms can easily borrow money to finance future growth.
Which of the following statements should ideally reflect a firm's strategy for competitive advantage? Our strategy is to win at any cost. We will be number one in the industry. Our aim is to create superior customer value while controlling costs. We want to be the market leader by replicating our competitor's strategy.
Our aim is to create superior customer value while controlling costs.
Hank runs a company that manufactures satellites for commercial and government use. It has few rivals. At the moment, the power of buyers, the power of suppliers, and the threat of substitutes are all low. Based on this information, what can Hank conclude? The manufacturer is likely to see little profit until the power of buyers improves. In this scenario, suppliers are likely to create and sell effective substitutes. This firm is an example of near-perfect competition. The company is likely to be very profitable as long as the threat to entry is low.
The company is likely to be very profitable as long as the threat to entry is low.
Wheat and Steak is a restaurant located inside a five-star hotel. It caters mainly to customers who are concerned about quality dining rather than the prices. In this scenario, which of the following will be a part of Wheat and Steak's strategic group? a nearby fast-food restaurant a food kiosk in an adjacent subway station a premium rooftop restaurant in the same city a mobile food cart parked opposite to the five-star hotel
a premium rooftop restaurant in the same city
Which of the following tasks in the AFI strategy framework involves evaluating the internal and external environments in which a firm operates? analysis formulation implementation competitive advantage
analysis
OpenUrToys Inc. is a consulting firm that opens your toys for you and then films your emotional response. They have many clients and are able to generate above average returns relative to their competitors. In this scenario, we would conclude that OpenUrToys Inc. probably has a competitive advantage. sustainable competitive advantage. a competitive parity. a competitive disadvantage.
competitive advantage.
The first step to gain and sustain a competitive advantage is to define a firm's vision, mission, and values. understand the strategies of the competitors. put the guiding policies of a firm into practice. develop functional and business-level strategies.
define a firm's vision, mission, and values.
Given the structure of the automobile industry, entering the auto manufacturing industry seemed risky. Yet Tesla Motors joined the fray. Rather than attempting to compete head-on with internal combustion engines, Tesla Motors entered the all-electric car segment, a much less crowded niche in the overall car industry. Which of the following is Tesla most hoping to benefit from in this market niche? network effects economies of scale customer switching costs capital requirements
economies of scale
Contour Inc., a vendor, regularly supplies capacitors to All Purpose Electronics for use in its products. Therefore, Contour Inc. is All Purpose Electronics' internal stakeholder. director. shareholder. external stakeholder.
external stakeholder
Farm to Table Inc. is a supermarket chain. Due to strong competition from other stores in the industry, Farm to Table has aggressively used branding, pricing, and superior customer service to uniquely position itself in the market. As a result, the supermarket chain has been able to differentiate itself from its competitors and sell its products at higher prices. Which of the following industry competitive structures does this scenario best illustrate? perfect competition monopolistic competition monopoly oligopoly
monopolistic competition
Nye Studios is a large production company that controls a major portion of the television industry's market share along with two other firms. Despite its competitiveness with the two other firms, it is influenced by their actions and often has to consider their strategic actions before acting on its own. In this scenario, Nye Studios is most likely functioning in a(n) ________ industry. oligopolistic monopolistic perfectly competitive monopolistically competitive
oligopolistic
In order to better achieve a competitive advantage, firms must now adopt a holistic approach towards satisfying multiple stakeholders opposed to focusing on the needs of their stockholders. This integrative approach is referred to as... stakeholder strategy. internal shareholder strategy. integration strategy. exchange relationship strategy.
stakeholder strategy
The process that describes the method by which managers conceive of and implement a strategy that can lead to a sustainable competitive advantage is called strategic process. strategic technology. strategic management. strategic planning.
strategic management.
Visionary companies are able to outperform their competitors because their vision statements are more product-oriented. they provide more aspirational visions. their visions are primarily financial. they isolate internal stakeholders in defining their visions.
they provide more aspirational visions.
Jennifer was just named the CEO of a pen company called National Pens Inc. She immediately changed the name to "Jenn's Pens." When asked why she made this change by the board of directors, who showed research that there was no correlation between success and CEP names, she responded by saying, "my previous company had the name of their CEO in the title, and they were very successful." This fallacy on Jenifer's part reveals her confirmation bias. optimal decision making. escalation of commitment. groupthink.
confirmation bias
To implement specific business strategies, general managers of strategic business units rely on external stakeholders. corporate executives. strategic leaders. functional managers.
functional managers
Which of following practices of a firm satisfies its ethical responsibilities? using plastic as the packaging material, even though it is harmful to the environment, yet legal outsourcing production to a less developed country and paying wages that are below its own country's accepted minimum wages using advertising and other forms of promotion to endorse luxurious lifestyles selling vaccines at a subsidized price in a less developed country even though this results in reduced shareholder returns
selling vaccines at a subsidized price in a less developed country even though this results in reduced shareholder returns
Which of the following statements is true of corporate strategy? The objective of corporate-level strategy is to ensure that the sum of the values of individual business units is greater than the overall corporate value. A corporate strategy must be able to create synergies across business units that are quite different. Formulating a corporate strategy involves general managers answering questions relating to how to compete in order to achieve superior performance. Deciding whether to adopt a differentiation or a cost-leadership strategy is part of formulating the corporate strategy.
A corporate strategy must be able to create synergies across business units that are quite different.
Bill Lewis wants to become a business strategy consultant and doesn't understand how emerging consultants get started. Bill should familiarize himself with the ________ framework that outlines the important process when examining the concept of strategic management. AFI: Analyze-Formulate-Implement AFE: Analyze-Formulate-Execute API: Analyze-Plan-Implement APE: Analyze-Plan-Execute
AFI: Analyze-Formulate-Implement
First Pharma Inc. and GeoVax Inc. are two competing firms in the pharmaceutical industry. While First Pharma Inc.'s vision is "to be a preeminent drug manufacturer in the industry," GeoVax Inc.'s vision is "to make good health a reality for everyone around the world." Which of the following is an implication of these different visions? GeoVax Inc.'s vision is more product-oriented than the vision of First Pharma Inc. First Pharma Inc. is more likely to have a positive relationship between its vision and firm performance than GeoVax Inc. First Pharma Inc.'s vision is more long-term and futuristic than GeoVax Inc.'s vision. GeoVax Inc. will be more flexible than First Pharma Inc. when adapting to changing environments.
GeoVax Inc. will be more flexible than First Pharma Inc. when adapting to changing environments.
Suger & Sweet Sodas has seen its market share erode in recent years, as consumers increasingly turn toward healthier beverage choices such as unsweetened sparkling water. Hoping to rekindle interest in sugary sodas, Suger & Sweet decides to produce a limited run of "throwback" cans using labeling first introduced in the 1980s. What is wrong with this strategy? It fails to face the competitive challenge. It does not involve concrete actions. It lacks strategic commitments. It tries to be everything to everybody.
It fails to face the competitive challenge.
Sally manages the supply chain for a company that sells diamond watches. She learns that economists are predicting a moderate to severe recession in the next six to eight months. Based on that information, what action should Sally recommend to the company's owner? Increase supply. During recessions, businesses that focus on low-cost solutions make significant profits. Reduce supply. Customers generally reduce their purchases of luxury items when the economy falters. Maintain the supply at its current rate. Economic forecasts are rarely accurate. Wait six months and see what happens. Recessions rarely affect consumer spending.
Reduce supply. Customers generally reduce their purchases of luxury items when the economy falters.
What is the strategic management process? The CEO decides who the product managers will be for a company. The CEO defines the main problems facing a company. Strategic leaders design a method to formulate and implement strategy. Strategic leaders focus on creating a vision that reflects the company's strategy.
Strategic leaders design a method to formulate and implement strategy.
Dora's Supplies manufactures medical devices. The firm's profitability depends on several variables that are subject to occasional change, including the cost of parts and labor, changes in medical practices, and the price of oil used in both manufacturing and shipping. To account for the potential impact of changes to any of these variables, Dora's Supplies managers should implement a(n) ________ approach. top-down strategic planning scenario planning upper-echelon strategic business units
scenario planning
A firm's strategic position is likely to be strong when the entry barriers within the industry it operates in are low and the exit barriers are high. its suppliers and vendors can easily forward-integrate and buyers can backward-integrate. all the five forces in Porter's model are strong. the gap between the value the firm's product generates and the cost to produce it is large.
the gap between the value the firm's product generates and the cost to produce it is large.
Tommy, a manager, is writing an analysis of his employer's current and possible future revenues. Which of the following could he identify as an economic factor in his firm's external general environment? the government regulations and laws in the country in which the firm exists the stage of the business cycle that the country is in the values and norms prevalent in the society in which the firm operates the bargaining power of the firm's suppliers and buyers
the stage of the business cycle that the country is in
