MGT499 Exam 2

sustainable strategy

under triple bottom line: Impervious Plastics reformulated its products to eliminate chemicals that were widely used in the industry but were being investigated for their potential negative effects on the environment

while the market share of the company in the beverages industry will be high, the market share in tobacco industry will be low

Real Goods Inc. is a large conglomerate. The company's beverages strategic business unit (SBU) has been recognized as a cash cow, and its tobacco SBU has been categorized as a dog. Which of the following can be inferred from this scenario?

the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality

A drawback of short-term contracting as an alternative to making a component in-house is that

Strong focus on innovation to improve

A high percentage of R&D/Revenue ratio indicates a(n)

related linked diversification

A strategy of _____ will be most beneficial for a firm to enhance its overall corporate performance.

zigzags

A value curve indicates a lack of effectiveness in a firm's strategic profile when it

Intrapreneur

A. G. Lafley at Procter & Gamble (P&G) had implemented an open-innovation model, which had greatly benefitted the company. In the light of this information, we can conclude that A. G. Lafley is a(n)

Failed to refine its strategic position over time

Although JetBlue used a blue ocean strategy to achieve an initial competitive advantage, it failed to maintain this advantage. Which of the following provides the best reason for this development?

A new competitor is perceived to provide similar value, but in addition offers innovative self checkout

Due to its large sales volume and low cost structure, Quick Serve Mini-Marts enjoys a cost leadership position. Which of the following scenarios might threaten Quick Serve's competitive advantage?

transform their strategy of how to compete into a blueprint of actions and initiatives

During the process of formulating an effective business model, a firm's managers should first

diversification premium

ESB Group is the parent company of many related businesses under its banner. Each share of the parent company is quoted at $220. However, if this had to be assessed by adding the stock prices of each of its strategic business units, the value would only be $200 per share. In this scenario, what has ESB Group created?

industry

Each stage of the vertical value chain typically represents a distinct _____ in which a number of different firms are competing

economies of scope

Heirloom Furniture is a brand reputed for its wide variants of sofas that introduced a new range of mattresses and bed frames a few years ago. Since most of its products could be produced using the same resources and technology, the company's cost structure lowered, while its product portfolio widened. In this scenario, which of the following value and cost drivers is Heirloom applying?

enter into the market in large numbers, creating herding effect

It is important for a firm to win over the early majority section of the market to ensure the commercial success of an innovation because they

450

Mobius Electronics incurs a cost of $350 to produce one unit of a cell phone. The company's management has priced the product at $600 in the market. Considering the technological advancement of the cell phone, customers perceive its value to be around $800. What is the economic value created in this scenario?

implement prices innovations that lower per-unit costs

Potomac Industries is a manufacturer of high-definition televisions. The industry has gone through a period of rapid growth and expansion, and has started to experience a decline in the rate of growth. Several smaller firms have been bought out by larger competitors, and competition for market share is intensifying. Which of the following strategies is most likely to give Potomac a competitive advantage?

disruptive innovation

Streaming video services replacing brick-and-mortar video rental stores would be an example of a(n)

experience curve

The concept of a(n) _____ attempts to capture both learning effects and process improvements at firms

offer a differentiated product or service at a low cost

The primary goal of a firm pursuing a blue ocean strategy should be to

lower cost and increasing perceived customer benefits

To initiate a strategic move that allows a firm to open up new and uncontested market space through value innovation, managers must address four key questions when formulating a blue ocean business strategy. These questions focus on:

product differentiation

WellMade Manufacturing is a large conglomerate that operates only in its home country. The company competes in industries like the consumer electronics, health care, hotel, airlines, education, and

the weight the benefits and costs carefully when adopting a new product

What is true of the early majority section of consumers?

early and late majority

Which customer segments as described in the chasm framework make up the mass market

Vertical Integration

_____ is best described as a firm's ownership of its production of needed inputs or of the channels by which it distributes its outputs.

disrupt industry

Closer connex developed an earphone that receives emails and text messages and converts them to voice messages. The models had poor reception, but they rapidly improved over time

she has failed to account for external factors such as customer perceptions and shareholder perceptions

Erin is the manager of gardening supplies wholesaler SpringTime Inc. The company's vision is to become the leading supplier of gardening materials west of the Mississippi River. In assessing the firm's current state, Erin has determined that the firm could differentiate itself from competitors with an easy-to-use online ordering system and a two-day delivery guarantee. To accomplish this, Erin has determined that SpringTime must spend the next two quarters honing its capabilities for sourcing materials quickly and improving its web development competencies. According to the balanced scorecard approach, what is wrong with Erin's thinking?

forward vertical integration

Incline Electronics relied on a large chain of consumer electronics stores to sell its tablet computers, cell phones, and televisions and also to provide customer service and technical support. However, that retailer outsourced its service departments, and customers began to complain that they could not get reliable tech support for Incline products. In response, Incline Electronics decided to set up its own tech support department, and it also began to investigate opening its own brand-based retail stores. What does this scenario best illustrate?

increased competition from imitators

Lillypad Toys is a manufacturer of educational toys for children. Six months ago, the company's research and development division came up with an idea for a unique touchscreen device that can be used to introduce children to a number of foreign languages. Three months ago, the company produced a working prototype, and last month the company successfully launched its new device on the commercial market. What should Lillypad's managers prepare for next?

related-linked strategy

Nocturnal Products started as a luxury brand for designer apparel. Soon, the company expanded by launching its own line of premium perfumes, watches, bags, and home furnishings. This expansion allowed the businesses under the company to share a few of the common competencies in products, services, technology, and distribution. Which of the following corporate strategies is Nocturnal pursuing in this scenario?

subscription based

Shark Fin Golf Club requires its members to pay a quarterly or an annual fee to use its services. Irrespective of whether they frequently use the services during the payment period or not, members have to pay in advance. Which of the following business models does this best illustrate?

High price, high comfort, high customer service, high concessions variety, low hours of operation

The strategy canvas for movie theaters includes factors such as prices, comfort, customer service, concessions variety, and hours of operation. Which of the following value curves is most likely to represent a theater that successfully positions itself as a differentiator?

triple bottom line

The top management at Sunshine Vitamins, through rigorous testing, ensures that the company develops and sells vitamins that are free of harmful side effects. Also, the company ensures that the chemical waste generated in the manufacturing process is kept to a bare minimum and is disposed of according to the regulations of the Environmental Protection Agency. The management assesses its overall performance based on these dimensions. Thus, the managers at Sunshine Vitamins are applying the _____ approach to measure firm performance

opportunity cost

When SW International declared a dividend of $20,000,000, its market value increased from $8 billion to $8.5 billion. However, it lost a chance to reinvest $20,000,000 in the research and development of a new product which would have earned a profit of $200 million. Thus, this $200 million is referred to as SW International's

balanced scorecard

Which of the following frameworks used to measure competitive advantage relies on both an internal and an external view of a firm?

Fun Frames and Highwire have achieved differentiation party

While Fun Frames incurs a cost of $12 for a pair of eyeglasses, Highwire, its competitor, manufactures a pair of glasses at $10. Both the companies are able to sell their glasses for a maximum of $30 per pair. Which of the following statements is true in this scenario?

Product, process

while the industry for cell phones with holographic keyboards will focus more on ______innovation, the tablet industry will focus more on _____ innovation