SIE 367 Midterm 1 Quiz Review
A customer-oriented vision statement focuses employees to think about how best to solve a problem for a consumer. improve a popular product. make a product easier to use. increase their efficiency for consumers.
A
A defining characteristic of the pay-as-you-go business model is that the users pay for only the services they consume. users pay for access to a product or service whether they use it during the payment term or not. initial product is often sold at a loss in order to drive demand for complementary goods. the basic features of a service are provided free of charge, but the user must pay for premium services.
A
According to the Level-5 leadership pyramid, a manager turns into an executive who is capable of building lasting greatness into the organization through a combination of willpower and humility when he or she reaches Level 5 Level 4 Level 3 Level 2
A
Higher value tends to require higher costs. higher quantities. more complements. more trade-offs.
A
How is a firm's task environment different from its general environment? Managers have some influence over external factors in the task environment; they have little direct effect over external forces in the general environment. Managers have no direct effect over external factors in the task environment; they have some influence over external forces in the general environment. Managers have no direct effect over external factors in the task environment; they have influence over all external forces in the general environment. Managers have influence over all external factors in the task environment; they have no direct effect over external forces in the general environment.
A
To be effective, firms need to back up their visions with strategic commitments that are costly and difficult to reverse. pursue visions that are exclusively financial and not aspirational. isolate top managers from the organizational values. increase their strategic flexibility by developing product-oriented vision statements.
A
_____, which is the return on risk capital, includes stock price appreciation plus dividends received over a specific period Total return to shareholders Earnings per share Receivables turnover Dividend yield
A
A company's strategic business unit does not need to adopt the overall corporate strategy. is responsible for its own profit and loss. decides which industries and markets to compete in for an entire conglomerate. is a division solely created to design strategies during turbulent times
B
Companies in the same strategic group are _____ to each other. complementors direct competitors strategic partners shareholders
B
Economies of scale are cost advantages that accrue for firms with high fixed costs larger output high capital risks low employee turnover
B
How do low interest rates affect a business? Firms tend to defer investments. Firms can easily borrow money to finance future growth. Consumer demand slows down. Business credit is harder to obtain.
B
How does a firm capture its producer surplus for a good or service? as market price per share as profit per unit sold as cost per unit sold as earnings per share
B
In the United States, which of the following was born out of dissatisfaction with the capitalist system in 2011? the Sarbanes-Oxley Act the Occupy movement the Taft-Hartley Act the Tea Party movement
B
The Chief Executive Officer (CEO) of Yahoo, Marissa Mayer, maintains that if a company builds the best product possible, profits will come. Identify the phrase that represents the new vision she developed for Yahoo. to provide a high-quality product that has environmental sustainability to make the world's daily habits more inspiring and entertaining to appeal to the whole person at work and at home to achieve human sustainability while having fun doing it
B
The value chain describes the competitive challenges a firm faces in a highly dynamic external environment. internal activities a firm engages in when transforming inputs into outputs. current consequences a firm experience due to its decisions in the past. strategic advantages a firm experience when its resources lack causal ambiguity.
B
To be cost-competitive, a firm should avoid moving on to a steeper experience curve. operate at the minimum efficient scale. attain the highest cost position. position itself below the productivity frontier.
B
Which of the following describes a situation in which firms acquire resources at a low cost, laying the foundation for a competitive advantage later? causal ambiguity better expectations of future resource value social complexity path dependence limiting current decisions
B
Which of the following factors best contributes to the U.S. automotive industry being characterized by high entry barriers? Few industrial products are as easy to build as cars powered by internal combustion engines. Car manufacturers require large-scale production in order to be cost-competitive. New auto companies create electric cars powered by simpler motors and gearboxes. New entrants in the automotive industry expect that incumbents will not or cannot retaliate.
B
_____ are barriers to imitation that prevent rivals from competing away the advantage a firm may enjoy. Cartel arrangements Isolating mechanisms Market niches Embargoes
B
_____ are incidents that describe highly improbable but highly impactful events. Fat tail risk events Black swan events Wild card evets Miracle events
B
_____ is the money shareholders provide in return for an equity share, which they cannot recover if the firm goes bankrupt. Market capitalization Risk capital Value creation Tangible assets
B
Airbnb rents spaces that previously would have been unused to generate revenue, while also dramatically increasing the potential amount of accommodation space in the 191 countries. This business uses a _____ technique. crowdsourcing binge watching peer-to-peer offshoring
C
Corporate executives at LikeReal, Inc. decide to compete in the remote model airplane industry by making the largest model planes available. By doing this, they completed part of their corporate strategy. implementation strategy. business strategy. functional strategy.
C
Firms pursuing a differentiation strategy primarily seek to provide products that are a direct imitation of the competitors' products. reduce the value gap to gain a competitive advantage. create higher customer perceived value than the value that competitors create. keep their cost structures lower than that of the cost leader.
C
Go West Airlines Inc. follows a cost-leadership strategy. Which of the following firms will most likely be its direct competitor? Deerpath Airlines Inc., which follows a cost-increase strategy John Henry Railways, which follows a differentiation strategy Blue Skies Airlines Inc., which follows a low-cost strategy Blue Cabs Inc., which follows a cost-leadership strategy
C
In 2008, BlackBerry's market cap peaked at $75 billion. By 2015 this valuation had fallen more than 90 percent, to less than $7 billion. BlackBerry fell victim to two important PESTEL factors in its external environment: sociocultural and technological. How did technology contribute to BlackBerry's decline? BlackBerry failed to adapt to a groundswell that involved workers bringing mobile devices to work BlackBerry failed to offer strong security features for its device. BlackBerry failed to change its device into one that could perform multiple tasks effectively. BlackBerry failed to produce an efficient emailing system using a keyboard
C
Pink Couture Inc. and Pink Blush Inc. are two companies in the apparel industry. While Pink Couture Inc. focuses on providing unique product features and superior customer service. Pink Blush Inc. focuses on low prices and minimal customer service. Both companies have been able to gain a competitive advantage. This is most likely because the companies have executed integrated strategies. entered into a cartel arrangement. pursued distinct strategic positions. engaged in direct imitation and substitution.
C
The resource-based view of a firm assumes that the resources of firms are highly scarce and hence the government interferes to ensure equal distribution. resources of firms are highly exhaustible and hence they cannot contribute to their competitive advantage. resource bundles of firms competing in the same industry are unique to some extent and thus differ from one another. resource bundles of firms competing in the same industry tend to be highly mobile, moving easily from firm to firm.
C
Using the _____ approach, managers audit their company's fulfillment of its social and ecological obligations to stakeholders such as employees, customers, suppliers, and communities as conscientiously as they track its financial performance. economic value creation accounting profitability triple-bottom-line shareholder value creation
C
Wear Crush Inc. is an apparel company known for its affordable clothes that follows a cost-leadership strategy. In this scenario, Wear Crush should ideally compare its strategic position with a luxury apparel company that sells designer clothes. a company that sells wristwatches at affordable prices. an apparel company popular among price-conscious customers. an online company that sells customized pet clothing.
C
When Jean Cult Inc. was operating at the minimum efficient scale of 10,000-12,000 units per month, the firm's cost per unit was $20. However, when the output level was increased beyond 12,000 units, the cost per unit increased to $22. This increase was attributed to the wear-and-tear of the machinery, and complexities of managing and coordinating. What is this phenomenon known as? learning-curve effect network effect diseconomies of scale resource ambiguity
C
Which of the following applies to the Strength-Threats quadrant of the SWOT matrix The local fast-food chain Easy Hot Dogs added a salad bar to maintain its competitive advantage against stiff competition The local fast-food chain Easy Hot Dogs revised its image of being a cheap-food place to being a wholesome family place in order to maintain its competitive advantage against stiff competition. The local fast-food chain Easy Hot Dogs used its wholesome image to maintain its competitive advantage against stiff competition. The local fast-food chain Easy Hot Dogs expanded its limited menu to maintain its advantage against stiff competition.
C
Which of the following is a customer-oriented vision? to be the best automobile company in the world to manufacture innovative products through continuous learning to enable people throughout the globe to identify their capabilities to be the most progressive insurance company
C
Which of the following is a drawback of the SWOT analysis? The SWOT analysis takes into account only the internal environment of a firm, ignoring the equally important external environment. This framework is only applicable to the manufacturing industries; it is ineffective when applied to the service firms. A problem with this framework is that a strength can also be a weakness, and that an opportunity can also simultaneously be a threat. A drawback of this framework is that it allows managers to merely evaluate a firm's current situation, and not its future prospects.
C
Which of the following is an example of an organizational value? Burtell Oil, Inc. launches an ad campaign that promotes the company as being environmentally friendly. Burtell Oil, Inc. lowers gas prices to gain an advantage over their closest competitor. Burtell Oil, Inc. increases the inspection of pipelines above the legal requirement to prevent oil spills Burtell Oil, Inc. finances research for finding oil deposits within the United States
C
Which of the following statements about product-oriented visions is true? They allow companies to effectively adapt to changing environments. They allow firms to take a need-based approach to their goals. They tend to force managers to take a myopic view of the landscape. They define a business in terms of providing solutions to customers.
C
Which of the following statements accurately brings out the difference between tangible and intangible resources? Tangible resources take a longer time to build, whereas intangible assets can be built comparatively easily. Tangible resources contribute to a company's competitive advantage, whereas intangible resources fail to do the same. Tangible assets can be bought on the open market, whereas intangible assets cannot be easily purchased. Tangible assets are difficult to imitate, whereas intangible assets can be easily replicated.
C
Which of the following statements correctly describes resource heterogeneity? Bundles of resources, capabilities, and competencies differ temporarily across firms. Bundles of resources, capabilities and competencies are all the same across firms. Bundles of resources, capabilities, and competencies differ across firms. Bundles of resources, capabilities, and competencies are mostly the same across firms.
C
While creating its AFI strategy framework, the Kowalski Candy Company decided what markets the firm should compete in. By doing this, what type of strategy did the company devise? business strategy global strategy corporate strategy ethical strategy
C
Who among the following is responsible for making business strategies in a large conglomerate? : the board of directors at the headquarters the shareholder of the company the general managers of individual business units the shareholder of the company
C
_____ of receivables turnover imply more efficient management in collecting accounts receivable and shorter durations of interest-free loans to customers. Unsteady ratios Steady ratios Higher ratios Lower ratios
C
______ is best described as an integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage. Supply chain management Inventor management Strategic management Integrated technology management
C
A differentiation strategy works best when a firm's focus of competition shifts to price, and when increasing differentiation of product features do not create additional value. firm has tangible resources, its focus of competition shifts to price, and equivalent substitutes are readily available. firm's differentiated products are commoditized, and costs of providing uniqueness do not rise above the customer's willingness to pay. firm has intangible resources, is able to pass on increases in supplier cost to the customer, and its differentiation appeal creates customer loyalty.
D
A firm always has a competitive disadvantage when its return on invested capital is 2 percent or lower in a declining industry declining steadly over two or more years. about the same as its closest competitor. below the industry average.
D
A firm incurs $100 to manufacture an office table. It fixes the market price of the table as $250, and discounts the price to $200. However, the maximum a person is willing to pay for it is $180. What is the amount of total perceived consumer benefits in this scenario? $250 $200 $100 $180
D
A firm's stakeholder strategy primarily allows the firm to transfer the contributions external stakeholders make into benefits for the internal stakeholders. facilitate the development of a competitive relationship between its internal and external stakeholders. effectively isolate its internal stakeholders(like shareholders and employees) from its external stakeholders (like customers and media). analyze and manage how various external and internal stakeholders interact to jointly create and trade value.
D
An industry has many firms that compete in it. While products between competitors tend to be similar, they are by no means identical. As a consequence, managers selling a product with unique features tend to have some ability to raise prices. This type of industry is an example of oligopoly. monopoly. perfect competition. monopolistic competition.
D
As a part of strategy formulation, a firm's functional strategy primarily concerns questions relating to where to compete. how to enter target markets. when to compete. how to implement business strategy.
D
Competitive rivalry based solely on _____ is destructive to firms as it transfers most of the value created in the industry to the customers. new product releases promotional campaigns product differentiation price-cutting
D
Even without differentiation parity, a firm pursuing a cost-leadership strategy can still gain a competitive advantage as long as its value gap is lower than that of its competitors. per-unit costs are higher than that of its competitors. learning curve is not steeper than that of its competitors. economic value creation exceeds that of its competitors.
D
Executives whose vision and actions enable their organizations to achieve competitive advantage demonstrate dominant strategic planning. top-down strategic planning. functional strategy strategic leadership.
D
Fadia Ammunition Inc., a firm controlled and managed by the government of Fadia, is the only company that has the license to produce defense arms in the country. Which of the following industry competitive structures does this best illustrate? oligopoly perfect competition monopolistic competition monopoly
D
Organic Food Inc., a multinational company, relies on its media partner Radio Plus to regularly advertise its offers, sales, and new products. Radio Plus is invested in theis relationship because it generates most of its revenue from advertising Organic Food's products. In this scenario, Radio Plus is Organic Foods Inc.'s stockholder. internal stakeholder. workforce. external stakeholder.
D
The competitive advantage that one firm has will be short-lived in an industry where resource heterogeneity is high. resource immobility is high. capabilities of a firm are not easily replicable. perfect competition exists.
D
The fixed asset turnover of a company is 8.3. What do you infer from this? The cost of capital invested on fixed assets is 8.3% of the total profit. 8.3% of the company's revenue is invested in fixed assets. The return on fixed assets will break even in 8.3 years. Every dollar spent on the company's fixed assets generates $8.30 of revenue.
D
With regard to the VRIO framework, Crocs Shoes was unable to sustain its competitive advantage primarily because its products were extremely expensive invaluable and common. non-substitutable. easy to imitate.
D
_____ is best described as decreases in cost per unit as output increases. Economies of replication Economies of scope Economies of scale Time compression economies
C
_____ are the legal owners of public companies. Creditors Employees Shareholders Category captains
C
Allure is a cosmetic brand that pursues a cost-leader strategy. Which of the following statements is true of the cosmetic brand? It appeals to the price-conscious buyers Its primary value driver is product uniqueness. It charges a premium price for its products. It directly competes against luxury cosmetic brands that charge premium prices.
A
Bass Watches Inc. initially spent eight man-hours to assemble a wristwatch. But as the production doubled, the number of hours spent on assembling a watch reduced by 20 percent. This increase in productivity reduced the company's cost per unit. What is this phenomenon referred to as? learning-curve effect network effect black-swan event time compression diseconomies
A
Five years ago, Palomino Airline was able to get a strong foothold in the airline industry by hiring a few pilots and crew and renting two airplanes, which flew routes between Denver, Omaha, Pierre, Cheyenne, and Helena. Which of the following summarizes the above factors that enabled Palomino to get started? low entry barriers low competition low fares low flight cancellations
A
Free Spirit Communications Inc. is a cellular service provider that charges its customers $1 for three hours of talk time. So, if a customer's talk time for a month is 60 hours, the company charges him or her $20 at the end of the month. Which of the following business models does this best illustrate? pay-as-you-go freemium subscription-based razor-razor-blade
A
Jake's Taxi Service is a new entrant to the taxi industry. It has achieve success by staking out a unique position in the industry. How did Jake's Taxi Service most likely achieve this position? providing long-distance cab fares at a lower rate than competitors; servicing the same area as competitors providing long-distance cab fares at a higher rate than competitors; servicing a larger area than competitors providing long-distance cab fares at a higher rate than competitors;servicing the same area as competitors providing long-distance cab fares at a lower rate than competitors; servicing a smaller area than competitors
A
Organizational values are the _____ that govern the behavior of individuals within a firm or organization. ethical standards and norms political principles and policies economic measures social beliefs and actions
A
Patterson Foods Inc. was the first company to start selling energy bars in its country -- a product that gained popularity among diverse groups. Soon, other companies started to sell their own brands of energy bars, thereby giving Patterson Foods ample competition. In response, Patterson Foods decided to limit its variety of energy bars to only four. However, it ensures that these four varieties were low in calories and low in cost. With this innovation, Patterson Foods Inc. consistently outperformed its competitor for ten years. In this scenario, Patterson Foods Inc. maintained a _______ through its innovative strategy. sustainable competitive advantage balanced scoreboard consistent power position fiduciary responsibility
A
Pilot Games Inc. allows users to play the trial versions of its games without any charge. However, users have to purchase the games to access the upgraded version of the games with advanced features. Which of the following business models is Pilot Games using in this scenario? freemium subscription-based pay-as-you-go razor-razor-blade
A
Rice Dazzle Inc. has been making the same breakfast cereal for 50 years. Recently, sales have plummeted. To counteract this, the company created a new package that included an endorsement by a celebrity. As a result, sales increased close to previous highs. However, the cereal itself remained the same. According the VRIO framework, is the new packaging a valuable resource for Rice Dazzle? Yes, because the new packaging has an endorsement by a celebrity. Yes, because the new packaging made the product more attractive in the eyes of consumers. No, because the new packaging did not improve the product itself. No, because the new packaging did help to not increase sales past the previous high for sales.
A
The "Gold Crisps" potato wafers manufactured by True Foods Inc. have been the highest selling wafers in the market. Though the market for wafers is flooded with competitors, True Foods Inc. has been able to maintain its market position for a long time. This is mainly attributed to the unique taste of the wafers that comes from the unique natural flavoring used by the company. This competency of True Foods Inc. will be considered as a(n) _____ resource in the VRIO framework. rare inexhaustible intangible virtual
A
The final step in industry analysis is to draw a strategic-group map. identify the key players in each of the five forces. identify the underlying drivers of the five forces. define the relevant industry.
A
True Help is a nonprofit organization that works toward rehabilitating the homeless. The credo of the organization is "help us help you." For an organization like True Help, which of the following statements would make an appropriate mission? We help the homeless gain and sustain financial independence by providing employment opportunities. One day, everyone in this nation will have a home to protect themselves. Our mission is to turn this not-for-profit organization into a for-profit organization so that the stakeholders are benefited. Help us help you find a home.
A
Which of the following is a characteristic of a fragmented industry? There are many small firms. Firms tend to have high profitability. Firms have substantial pricing power The entry barriers are high.
A
Which of the following is step 3 in the five-step process of stakeholder impact analysis? identifying the opportunities and threats the stakeholders present identifying the stakeholders' interests and claims identifying the most powerful stakeholders (both internal and external) and their needs identifying the social responsibilities of the firm toward its stakeholders
A
Which of the following resources is a firm's resource stock? reputation for quality plant and machinery cash in the bank land and building
A
Which of the following statements is true of a strategic position? Choosing a strategic position requires making important trade-offs between value and cost positions. Strategic positions are fixed; they do not change like the environment. Differentiation and cost leadership require similar strategic positions. A firm is said to have a competitive advantage when it ends up with strategic positions below the productivity frontier.
A
With the emergence of smartphones, users no longer have to carry a separate music player, a video game, a laptop, or a magazine to keep themselves entertained when traveling. A smartphone is loaded with a variety of applications to satisfy all the customer needs that different industries or products individually satisfied earlier. As a result, the smartphone industry has been posing a threat to a lot of other unrelated industries. What is this phenomenon best known as? industry convergence product differentiation customer myopia backward integration
A
_____ are best described as the ethical standards and norms that govern the behavior of individuals within a firm. Customs duties Corrective controls Organizational values Job descriptions
C
A firm will fail to create a sustained competitive advantage when the source of its competitive advantage is causally ambiguous fit between its internal strengths and the external environment is static. source of its competitive advantage is socially complex. resource bundles exhibit heterogeneity and immobility.
B
A(n) _____ is best described as a stand-alone division of a larger conglomerate, with its own profit-and-loss responsibility. functional department strategic business unit corporation affiliate company
B
Due to resource immobility, a critical assumption in the resource-based model of a firm, the competencies and capabilities of all firms in an industry are similar. resource differences between firms last for a long time. competitive advantage of a firm exists for a short period of time. resource bundles of a firm can be easily imitated by competitors.
B
The minimum wage in the country of New Morland is $8 an hour. Odion, a restaurant in New Morland's capital city, pays its servers $8 per hour. However, the management of the restaurant feels that this amount is excessive for workers whose only job is to clear tables. By continuing to adhere to the rules set by the government of New Morland, which of the following responsibilities is Odion satisfying? ethical responsibilities legal responsibilities philanthropic responsibilities demographic responsibilities
B
Value Autos Inc. has been trying to directly copy the strategies of Honk Autos Inc. Even though it is evident that Honk Autos Inc.'s success comes from its just-in-time inventory system, Value Autos Inc. has not been able to effectively apply the system in the same way. This is because the organizational structures, employees, cultures, and the overall business systems of both the companies vary from each other. Which of the following barriers to imitation does this scenario best illustrate? resource homogeneity social complexity path dependence resource mobility
B
Value drivers contribute to a firm's competitive advantage only if they can shrink the firm's value gap. the increase in value creation exceeds the increase in costs. they can restrict the firm from claiming a premium price for its products. the decrease in perceived value leads to an increase in costs.
B
What are network effects? the positive cost effects that accrue for firms with larger output because they can spread fixed costs over more units the positive effect that one user of a product or service has on the value of that product or service for other users the positive effect that the high price of the entry ticket has on incumbent industries the positive cost effects that standardized commodities have on incumbent industries
B
When a firm manufactures 2,000-3,000 units of a product, it incurs an average cost of $10 per unit. When it manufactures 3,000-4,000 units of the same product, the average cost per unit reduces to $7. However, manufacturing beyond 4,000 units will raise the average cost per unit to $9. Which of the following is the firm's minimum efficient scale? 2,000-3,000 units 3,000-4,000 units below 2,000 units above 4,000 units
B
Which of the following is a key question managers must answer to formulate an appropriate business-level strategy? Can we satisfy our customer needs? How will we satisfy our customer needs? Where will we satisfy our customer needs? When will we satisfy our customer needs?
B
Which of the following is an implication of all firms in an industry pursuing a low-cost position through application of competitive benchmarking? No firm would face direct competition from others in the industry; hence, profit potential would be high. The firms would eventually have no resources to invest in product and process. Each firm would be catering to a different customer segment. Each firm would be in a better position to gain a competitive advantage.
B
Which of the following is not an accurate expression of the economic value created per unit of a product sold? the difference between consumer's reservation price and firm's cost the difference between the price charged and the firm's cost the sum of consumer surplus and producer surplus the sum of consumer surplus and firm profit
B
Which of the following statements about competitive advantage is true? Competitive advantage is an absolute measure; it is not relative. Competitive advantage can be assessed by measuring accounting profit, shareholder value, or economic value. Competitive advantage is permanent and not transitory; once gained by a firm it stays with the firm. Competitive advantage is a one-dimensional concept.
B
Which of the following statements with regard to industry structures is true? Having a large number of competitors generally equates to higher industry profitability. A consolidated industry tends to be more profitable than a fragmented one. They are stable over time, not dynamic. Having few but large competitors increases the threat of strong competitive forces such as supplier or buyer power
B
_____ are best described as the value of the best forgone alternative use of the resources employed. Variable costs Switching costs Opportunity costs Social costs
C
A firm pursuing a differentiation strategy as opposed to a low-cost strategy will concentrate on leveraging its economies of scale through process technologies. create a lower economic value as compared to its competitors. focus its research and development on product technologies to add uniqueness. build an organization structure that relies on strict budget controls.
C
A firm that achieves superior performance relative to other firms in the same industry or the industry average has a(n) balanced scoreboard. equity leverage. competitive advantage. power position.
C
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 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 its suppliers and vendors can easily forward integrate and buyers can backward integrate
C
As the cumulative output in a firm increases, managers learn how to optimize the production process and improve workers' performance through repetition. This drives down the per-unit cost. Which of the following phenomena is best described here? productivity frontier diseconomies of scale learning effects network effects
C
As the legal owners, _______ have the most legitimate claim on a company's profits. employees board members shareholders creditors
C
Curry Rush is a premium Asian restaurant chain that differentiates itself from a large number of competitors by providing exclusively organic Vietnamese cuisine. It has some pricing power because it provides differentiated products and therefore, has some entry barriers in place. In this scenario, Curry Rush is most likely operating in a(n) perfectly competitive industry. oligopoly. monopolistically competitive industry. monopoly.
C
DFS Electronics Inc. ensures that all its products are highly durable and reliable by using techniques like zero-defect and lean manufacturing systems. These efforts not only add to the products' differential appeal, but also help the company save costs during production and avoid expenses due to after-sales services. Thus, the common value and cost driver responsible for DFS Electronics' strategic position as an integrator is the network effect. availability of complements. quality. diseconomies of scale.
C
Golden Harvest 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 Golden Harvest'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
C
In the freemium business model, the initial product is sold at a premium price and the complementary goods are given free. users are free to pay for the services in advance or after using the services. users are not charged for the basic features of a product or service, but the user must pay for premium advanced features or add-ons. users pay for access to a product or service whether they use it during the payment term or not.
C
Managers use the AFI strategy framework primarily to help their business achieve and sustain competitive parity. help reduce the economic contribution of their business. explain and predict differences in firm performance. minimize the wealth of their shareholders.
C
Which of the following is not an advantage of the balanced-scorecard approach to assess firm performance? It provides a concise report that tracks chosen metrics and measures and compares them to target values. It helps managers to implement feedback and organizational learning in order to modify and adapt strategic goals when indicated. It is a tool which can be effectively used by managers for both strategic implementation and strategic formulation. It allows managers to communicate and link the strategic vision to responsible parties within an organization.
C
Which of the following management tools will help determine whether a firm's resources, capabilities, and competencies are strengths or weaknesses? Porter's five forces analysis PESTEL analysis VRIO framework Ansoff's matrix
C
A high percentage of R&D/Revenue ratio indicates a(n) negligent investment toward research and development. inefficiency in the management to focus on new products. strong focus on marketing and sales to promote products and services. strong focus on innovation to improve current products and services.
D
How does availability of complements act as a value driver? Complements add value to a product by competing with it. Complements add value to a product when they imitate it. Complements add value to a product by offering an inferior substitute to it. Complements add value to a product when they are consumed in tandem with it.
D
If SA Pharmaceuticals obtain an 18 percent return on investigated capital, which of the following will help determine if it has a competitive advantage over other pharmaceutical companies? evaluating the liquidity ratios for other pharmaceutical companies comparing the value to the history of the firm's return of investment over a number of years assessing the value based on the shareholders' expectation of return on their capital comparing the return to the return on invested capital obtained by other firms in the industry
D
In 2014, Apple had a return on revenue of 29.3 percent, and Microsoft had a return on revenue of 32 percent. Even so, Apple had a higher return on invested capital than Microsoft. Why did this happen? Apple had a much higher selling, general, and administrative expense that Microsoft. Apple spent more on research and development and marketing and sales than Microsoft. Apple had a higher cost structure than Microsoft. Apple was able to charge a much higher margin for its products and services than Microsoft.
D
Silver Screen Cinemas Inc. and Digi Now Inc. are two companies that own and run movie theaters in malls and other commercial areas. While Silver Screen Cinemas Inc. pursues a cost-leadership strategy, Digi Now Inc. adopts a differentiation strategy. Which of the following statements is most likely true of this scenario? Digi Now will keep its customer service at an acceptable level, whle Silver Screen Cinemas will provide superior customer service. Silver Screen Cinemas and Digi Now will use a similar approach to create value for customers by attempting to offer everything to everyone. Silver Screen Cinemas will charge a premium price for its customers, while Digi Now will implement everyday low pricing. Digi Now and Silver Screen Cinemas will not be direct competitors to each other, and their customer segments will overlap very little.
D
Smart Feet Inc. produces shoes that are better quality and cost more to make than the shoes of its competitors. Smart Feet realizes that there will be a large difference between the cost to produce the shoes and the consumer's willingness to pay for them. Even so, Smart Feet decides to charge the same price as its competitors. Which of the following will most likely be the result of this action? Smart Feet will increase its marketability. Smart Feet will be bought by a competitor. Smart Feet will go out of business Smart Feet will gain market share.
D
Strategic leadership pertains to the use of power and influence by _____ to direct the activities of others when pursuing an organization's goals. production workers external stakeholders lower-level managers corporate executives
D
Superlative Productions spent 10 million dollars to buy the rights to a best-selling novel. The company then prepared for production by hiring a screenwriter to adapt the novel, casting the main roles, renting cameras and other equipment, and scouting locations in southern Arizona. Which of the following pairs of resources are both intangible? money spent to buy rights of novel; screenwriter's experience adapting novels money spent to buy rights for the novel; locations in southern Arizona best-selling novel; locations in southern Arizona best-selling novel; screenwriter's experience adapting novels
D
The CEO of True West Products Inc. (TWP) is a company that sells a wide range of products. It has decided to enter the markets of emerging nations like China and Brazil. This means that the cars, consumer electronics, and services such as hotels included under the TWP banner would be made available in these nations. Which of the following strategies does this scenario best illustrate? divisional strategy functional strategy business strategy corporate strategy
D
To help a firm achieve a competitive advantage, each distinct activity performed in the value chain needs to create a static fit between the company's internal resources and the external environment. reduce the immobility and the heterogeneity of the firm's resources. reduce the causal ambiguity and the social complexity of the firm's source of success. contribute to the firm's strategic position as either low-cost leader or differentiator.
D
True Moto Corp. (TMC) is a leading automobile company. The company has been able to sustain its competitive advantage primarily due to its high-quality and efficient electric motors. Most of its competitors have failed to develop similar electric motors at a reasonable price. Which of the following resource attributes listed in the VRIO framework has helped TMC sustain its competitive advantage? inexhaustible nature intangibility of the company's resource resource mobility high costs involved in imitation
D
Which of the following best illustrates a strategic business unit (SBU)? The human resource department of a large company that is responsible for hiring employees for all its divisional branches The product development team at the headquarters of a fast-food chain The market segment which can be categorized between the income levels $10,000 and $25,000 The consumer electronics division of a large company that also manufactures automobiles, apparel, and processed food
D
Which of the following examples reflects the strongest vision? At Fuentes Electronics, many employees get paid well but do not feel their work is important. At Fuentes Electronics, some employees do not understand the main goal of the company. At Fuentes Electronics, most employees want to create a better microwave oven than their closest competitor. At Fuentes Electronics, all employees are motivated to make the best microwave ovens on the market.
D
Which of the following features about a buyer indicates that the buyer has high bargaining power? when the buyer cannot credibly threaten to backwardly integrate into the industry when the buyer cannot purchase specific products from other sellers when the buyer faces high switching costs when the buyer operates in an industry where products are undifferentiated
D
Which of the following forces tends to be more important in determining a firm's performance? the entry barriers in the industry the underlying economic structure the number and size of other firms in the industry the actions of managers within the firm
D
Which of the following is more of a value driver than a cost driver? learning-curve effects experience-curve effects economies of scale superior customer service
D
Which of the following scenarios would threaten a firm that uses a differentiation strategy? The firm's product has not established an acceptable standard of quality. The firm adds product features that raise cost and perceived value. The firm increases the uniqueness of its product without increasing its price. The firm's focus shifts to price rather than value-creating features
D
______ is best described as a framework that helps firms recognize and address the economic, legal, social, and philanthropic expectation that society has of the business enterprise at a given point in time. Integrated social network Strategy formulation Strategic positioning Corporate social responsibility
D
