WPC Quiz Questions

Which of the following best exemplifies social complexity as an isolating mechanism? a. Kristin's Cosmetics did not fully understand the reasons for the success of Monica's Makeup and therefore had difficulty competing with the firm. b. Kristin's Cosmetics had difficulty competing with Monica's Makeup because it could not access the many makeup factories in Kentucky as easily as its competitor. c. Kristin's Cosmetics attempted to imitate how Monica's Makeup combined its management and product development systems with little success. d. Kristin's Cosmetics failed to acquire the resources for its eyeliner at a low cost and thereby lost its competitive advantage over Monica's Makeup.

...Kristin's Cosmetics attempted to imitate how Monica's Makeup combined its management and product development systems with little success.

Which of the following describes a firm in the Globalization 1.0 stage? a. Asha Inc. had a base office in New York and a replica office in Amsterdam. b. Asha Inc. had a large office in New York, which functioned with other large offices in Europe and Asia c. Asha Inc. had a large office in New York, which was one cog in a global network. d. Asha Inc. had a base office in New York and distributed some of its products overseas.

Asha Inc. had a base office in New York and distributed some of its products overseas.

Which of the following in an observable feature in the Globalization 3.0 stage? a. The typical firm has recognized from a global enterprise with different centers of expertise to a multinational company with self contained operations in a few countries b. Only sales and distribution functions of a multinational enterprise are located in a few key countries. c. Based on an optimal mix of costs, skills, and PESTEL factors, companies now freely locate business functions anywhere in the world. d. Knowledge flow between the local replicas of the multinational enterprises and their U.S. headquarters is limited.

Based on an optimal mix of costs, skills, and PESTEL factors, companies now freely locate business functions anywhere in the world.

Corporate executives at LiveReal, Inc decided to compete in the remote model airplane industry by making the largest model planes available. By doing this, they completed part of their a. corporate strategy b. implementation strategy c. functional strategy d. business strategy

Business Strategy

In the top-down strategic planning approach, all strategic intelligence and decision-making responsibilities rest primarily on the a. external stakeholders b. chief executive officer c. general manager d. functional managers

CEO

Which of the following best exemplifies why Disney showed superior post merger integration capabilities? a. Disney pursued a combination of horizontal and vertical integration through its acquisitions b. Disney managed its new subsidiaries more like alliances rather then attempting full integration c. Disney did a thorough job in eliminating principal agent problems in the firms it acquired d. Disney used a corporate strategy based on a build borrow or buy framework for its acquisitions

Disney managed its new subsidiaries more like alliances rather then attempting full integration

Invoro is a market leader in consumer electronics. If Finolo and Ethver, companies that manufacture televisions, develop the same customer knowledge base and create products with the same customer appeals as Invoro, then a. Inovo will have a resource that is rare but no longer valuable b. Invoro will have a sustainable competitive advantage in the industry c. Finloe and Ethver will have a VRIO Resource d.Invoro will have a resource that is valuable but not longer rare

Invoro will have a resource that is valuable but not longer rare

While KFC focuses on international markets, its competitor, Chick fil a, focuses on the domestic U.S. market. What is the reason behind this strategic difference? a. Chick fil a has a larger customer base and number of outlets in the us market that its competitor KFC b. Chick fil a is part of a larger conglomerate, whereas KFC has more flexibility to pursue a geographic diversification strategy c. KFC has more financial resources than Chick fil a since it is a publicity trade stock company d. KFC wants to follow a differentiation strategy, and chick fil a wants to pursue a cost leadership strategy

KFC has more financial resources than Chick fil a since it is a publicity trade stock company

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 in Odion satisfying? a. legal responsibilities b. demographic responsibilities c. philanthropic responsibilities d. ethical responsibilities

Legal responsibilities

Makes Scents Inc., a company that manufactures and sells premium perfumes, is pursuing an international strategy. Price Smasher Inc a supermarket chain, follows a multi-domestic strategy. Which of the following statements is most likely true of this scenario? a. Makes Scents inc will not be able to use its home based core competencies in foreign markets as much as Price Smasher inc will b. Makes Scents inc will sell the same products in both domestic and foreign markets, whereas price smasher inc will customize its product offering to suit local requirements c. Makres Scents inc will be better protected from exchange rate fluctuations when compared to Price Smasher inc d. Makes Scents Inc will pursue a differentiation strategy at the business level, whereas Price Smasher inc will pursue a cost leadership strategy at the business level

Makes Scents inc will sell the same products in both domestic and foreign markets, whereas price smasher inc will customize its product offering to suit local requirements

Which of the following real-world scenarios best exemplifies formalization? a. McDonald's use of standard operating procedures across the world b. Zappos' focus on allowing its customer service employees to use their own approach rather than depend on scripts c. Yahoo's decision to fire its CEO after incurring huge losses d. W. L. Gore's associates organizing themselves in project-based teams that are led by sponsors, not bosses

McDonald's use of standard operating procedures across the world

Clear Calls Inc., a telephone service provider, has a large user base mainly because phone calls and messages between all Clear Calls users are free. When a person switches to a Clear Calls network, his or her entire network of family and friends is likely to switch to the same network to avail the benefit of free calls and messages. In addition, an existing user who gets a new user to register with Clear Calls Inc. is given a free wireless connection. This has helped to keep competition away from Clear Calls. In this scenario, which of the following factors is acting as an entry barrier for Clear Calls Inc.? A. economies of scale B. high capital requirement C. network effects D. high fixed costs

Network Effects

Ruby, a recent fashion design school graduate, has received praise for her clothing designs from her peers and friends on social networking sites; this has inspired her to set up a store where she can design and sell apparel. After experiencing some success with sales, she recruits two employees to handle customers at the store. However, she handles other day-to-day affairs herself, while continuing to design clothes. Which of the following is likely to be a pitfall of this organizational structure established by Ruby? a. The online admiration of her designs will not translate into sales. b. Once the firm starts growing and attracting more customers she is likely to feel overloaded. c. People are highly unlikely to buy clothes from a store run by a fashion design student. d. Hiring more employees will result in loss of intellectual property.

Once the firm starts growing and attracting more customers she is likely to feel overloaded.

the _____ allows the scanning, monitoring, and evaluating of changes and trends in a firm's macro environment. A. SWOT analysis B. PESTEL Framework C. VRIO framework D. BCG matrix

PESTEL framework

Which of the following real-world scenarios best exemplifies the use of organizational culture to build competitive advantage? a. W. L. Gore & Associates organizes its employees into project-based teams. b. Apple develops high-tech products that are preferred by consumers across the world. c. Southwest Airlines pilots sometimes help load baggage, which results in quick turnaround time. d. GM offers compensation if its products do not meet a consumer's expectations.

Southwest Airlines pilots sometimes help load baggage, which results in quick turnaround time.

Why does strategy implementation often require changes within an organization? a. Strategy implementation transforms strategy into actions and business models. b. Strategy implementation does not affect resource allocation and power distribution within an organization. c. Strategy always follows structure. d. Strategy implementation is less important than strategy formulation.

Strategy implementation transforms strategy into actions and business models.

Which of the following best illustrates physical-asset specificity? a. a machine solely designed to give a candy its trademarked shape b. a unique training program developed in an organization c. a generic machine that can be used to churn different mixtures d. a ship container designed to carry more that the average load of iron ore

a machine solely designed to give a candy its trademarked shape

Gilroy Crackers enjoys a competitive advantage as a cost leader because high demand for its products has allowed it to operate at the minimum efficient scale. Which of the following scenarios would be most concerning to the manager of Gilroy Crackers? a. A major winter storm shuts down Gilroy's production for several days b. Gilroy's leading competitors develops leading competitors develops a new low sodium product c. a wheat shortage raises input costs across the industry d. Gilroy's most reliable production worker takes a job in another industry

a major winter storm shuts down Gilroy's production for several days

Vassar Systems Inc. wants to globally expand its market. It intends to ensure that its mode of foreign entry allows it to have strong control over its operations and protect its intellectual property, though that may mean investing a significant amount of capital and other resources. In this scenario, which of the following foreign entry modes would best suit Vassar Systems? a. acquisition b. franchise agreement c. exporting d. licensing

acquisition

The name for an agreed-upon code of conduct in business, based on societal norms, is a. business ethics b. fiduciary responsibilities c. poison pills d. strategic business points

business ethics

The managers at Camphor Plastics decided that their firm needed to diversify because of overall falling sales and lower performance in one sector. How does diversifying compensate for the lackluster performance in this sector? a. by motivating managers b. by increasing the firm's risk in another sector c. by sharing their market power d. by having higher performance in another sector

by having higher performance in another sector

How does horizontal integration within an industry affect the surviving firms? a. by strengthening the bargaining of the surviving firms vis-a-vis suppliers and buyers b. by strengthening the rivalry among firms c. by requiring the surviving firms to shift their focus from mom price to price competition d. by increasing the threat the surviving firms will face from new entrants

by strengthening the bargaining of the surviving firms vis-a-vis suppliers and buyers

Which of the following is an example of social entrepreneurship? The committee approved the new formula for an all purpose cleaner because it a. cleaned better than other cleaners and did not cost more to produce b. cleaned as well as other cleaners and used organic ingredients c. cleaned as well as other cleaners and could be produced more efficiently d. cleaned better then other cleaners and used easy to obtain ingredients

cleaned as well as other cleaners and used organic ingredients

One way to foster ethical behavior in employees is to a. view clients as counter parties to transactions. b. avoid codifying organizational culture c. align the vision statement of the organization with its informal culture. d. create a control system that encourages desired values.

create a control system that encourages desired values.

Which of the following best illustrates site specificity? a. equipment necessary for mining bauxite and aluminum smelting b. bottling machinery to manufacture bottles with trademark shapes c. investment made to train employees to operate computers d. investment made in human capital to master procedures of a specific organization

equipment necessary for mining bauxite and aluminum smelting

Which of the following features helps match a cost-leadership strategy to a functional structure? a. decentralization b. process and product innovations c. focus on economies of scale D. flexibility and mutual adjustment

focus on economies of scale

Mondo Tacos, a fast food restaurant, operates through a business model in which individuals can buy the rights to set up Mondo Taco stores and sell the company's food in return for a lump sum fee at the beginning of the contract and a percentage of revenues every month. The owners of the stores have to offer a menu approved by the company's headquarters and also maintain consistent customer service as expect in its flagship store. Which of the following alternatives to integration does this best illustrate? a. credit rationing b. franchising c. bootstrapping d. crowdsourcing

franchising

Ira can be categorized under the late majority under the late majority customer segment. Which of the following behaviors is he most likely to exhibit? a. he will not rely on endorsements bu the early majority or early adopters b. he will buy beta versions of new products and technology c. he will prefer to buy from well established brands rather than unknown new ventures d. he will be confident in her abilities in her ability to master any new technology

he will prefer to buy from well established brands rather than unknown new ventures

In the context of the SWOT matrix, which of the following best exemplifies a firm's internal strength? a. rise in the income of the demographic segment to which a firm caters b. growth in the size of the market in which a firm operates c. loss of a competitor's reputation d. increase in a firm's customer loyalty

increase in a firm's customer loyalty

Happy Foods and General Grains both produce similar puffer rice breakfast cereals. For both companies, the cost of producing a box of cereal is 45 cents, and it is not possible for either company to lower their production costs any further. How can one company achieve a competitive advantage over the other? a. raise prices above the current reservation price b. increase the number of stock market shares available to investors c. increase total perceived consumer benefits through differentiation d. lower prices to the break-even price

increase total perceived consumer benefits through differentiation

Lillypad Toys is a manufacturer of educational toys for children. Six months ago, the company's research and development devision came up with an idea fro 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? a. a sharp decline in demand for the product b. a difficult struggle to move from invention to innovation c. increased competition from imitators d. a prolonged period of uncontested success

increased competition from imitators

The board of directors of a public stock company consists of a. individuals who formally represent the firm's shareholders and oversee the work of executives. b. the legal owners of a publicly traded company that was purchased in a leveraged buyout. c. managers appointed by the owners of a company to run its day-to-day operations. d. employees of a company who belong to the senior management and directly report to the CEO of the firm.

individuals who formally represent the firm's shareholders and oversee the work of executives.

With the emergence of smartphones, users no longer have to carry a separate music player, a video game, a laptop, or a magazine 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? A. Product differentiation B. Customer myopia C. Industry convergence D. Backward integration

industry convergence

Marika received a tip from a close friend who is an executive manager of a publicly traded company called MicroGreen Inc. The manager received some inside information about how to trade MicroGreen stock to get a huge profit. He shared this information with Marika. This scenario is an example of a. adverse selection. b. shared value creation. c. stakeholder strategy. d. information asymmetry.

information asymmetry.

What do we call the board members who are part of a company's senior management team appointed by shareholders to provide the board with necessary information pertaining to the company's internal workings and performance? a. auditors b. investors c. inside directors d. outside directors

inside directors

Which of the following is a disadvantage of a horizontal integration corporate strategy? a. it increases the potential for legal repercussions b. it increases the threat of new entrants in an industry c. it increases competitive intensity within an industry d. it increases the costs associated with increasing value

it increases the potential for legal repercussions

Meadows Mowers initially spent nine man hours to assemble a lawnmower. but as the production doubled, the number of hours spent on assembling a mower reduced by 20 percent. This increase in productivity reduced the company's cost per unit. What is this phenomenon referred to as? a. network effects b. time compression diseconomies c. learning curve effect d. black swan event

learning curve effect q

Salubre Pharmaceuticals invested $3.4 billion dollars to develop a new drug for individuals with diabetes. After Salubre receives FDA approval of the drug, its marginal cost to produce the drug for market will be a. low b. high c. moderate d. unpredictable

low

As the legal owners, ________have the most legitimate claim on a company's profits. a. creditors b. board members c. shareholders d. employees

shareholders

Which of the following scenarios best exemplifies a platform business? a. Gena founded a bike based transportation company that offers environmentally friendly rides to customers within a 25 mile radius b. devin purchases electronic parts from a variety of vendors and assembles them into inexpensive MP3 players that he sells to consumers c Rual operates a consulting firm in which businesses hire him to assess deficiencies in their organizational culture d. myra operates an industrial test kitchen in which local growers bring their produce to local chefs, who use the kitchen to try new recipes and determine which produce to buy

myra operates an industrial test kitchen in which local growers bring their produce to local chefs, who use the kitchen to try new recipes and determine which produce to buy

Eon Inc., Electravia Inc., and FC Inc., the three largest firms in the consumer electronics industry, hold close to 85 percent of the industry's market share. These companies mainly compete against each other by providing unique features in their products rather than pricing them low. These firms are interdependent, and each firm must consider the strategic actions of its competitors. Which of the following industry competitive structures does this scenario best illustrate? A. Monopolistic competition B. Oligopoly C. Monopoly D. Perfect competition

oligopoly

_______ are best described as the value of the best forgone alternative use of the resource employed. a. opportunity costs b. variable costs c. switching costs d. social costs

opportunity costs

Although True Ion Inc. and One Electro Inc. operate in the same consumer electronic industry, True Ion Inc. has better sales and brand equity. This is attributed to True Ion Inc.'s commitment to innovation. The company has adequate financial and human capital to invest in research and development, an area in which One Electro Inc. lacks. In this scenario, which of the following critical assumptions of the resource-based view of a firm has been illustrated? A. resource equality B. resource heterogeneity C. resource mobility D. resource maturity

resource heterogeneity

In terms of the build-borrow-or-buy framework, a firm's internal resources are considered to be relevant when they are A. similar to those that need to be developed and superior to those of competitors in the targeted area. B. similar to those that need to be developed and inferior to those of competitors in the targeted area. C. different from those that need to be developed and superior to those of competitors in the targeted area. D. different from those that need to be developed and inferior to those of competitors in the targeted area.

similar to those that need to be developed and superior to those of competitors in the targeted area

Return on risk capital primarily includes a. stock price appreciation plus dividends received over a specific period b. economic value created by a firm plus reservation price c. consumer surplus plus firm profit d. account receivables plus account payables

stock price appreciation plus dividends received over a specific period

As the CEO of a conglomerate, Juana Mark exhibited her strong commitment toward the company's core value that customers' well-being is more important than profit when she decided to liquidate the company's tobacco subsidiary. The tobacco brand sold by her company was a major revenue earner in lesser-developed nations. However, Juana believed that her company had to be responsible toward society. In this scenario, Juana has demonstrated a. strategic leadership b. intrapreneurship c. machiavelliamism d. individualism

strategic leadership

A firm's _______ relates to its ability to create value for customers (V) while containing the cost to do so (C). A. Strategic Position B. Advantage of the marketplace C. Industry analysis D. Industry Effects

strategic position

When a blue ocean strategy goes bad, a firm has neither a clear differenctiation nor a clear cost-leadership profile. This situation is referred to as a. stuck in the middle b. burned at the top c. caught in the transition d. buried at the bottom

stuck in the middle

Shark Fin Golf Club requires its members to pay a quarterly or annual fee to use its services. irrespective of whether they frequently use that services during the payment period or not, members have to pay in advance. Which of the following business models does this best illustrate? a. razor-razor-blade b. pay-as-you-go c. subscription-based d. freemium

subscription-based

Multinational enterprises (MNEs) like Harley-Davidson, Rolex, and Starbucks are said to be following an international strategy because a. they offer the same products or services in all their stores throughout the world. b. they pursue a cost leadership strategy in their respective industries. c. they attempt to combine benefits of localization and standardization strategies simultaneously d. they are highly responsive to the local needs and preferences of customers in the host countries.

they offer the same products or services in all their stores throughout the world.

Rock Bottom Tiles has developed a new customer-oriented business model. Rather than maintain a network of showrooms across the country, the business will now let customers choose several styles that interest them from an online site, and will ship samples of each of the styles to the customer to test in their home free of charge. Once they have settled on a tile choice, Rock Bottom will send a representative to their home to schedule installation. The company has determined that busy middle-class customers will value the convenience of the new model, which allow them to upgrade the look of their homes without spending time browsing showrooms. The new model will be created by selling the old showrooms and shifting resources to the new online site and regional offices for sales personnel. What question remains for Rock Bottom to ask in order to put its strategy into action? a. how are the offering to the customers created? b. who are the main stakeholders who will be performing the activities? c. what activities need to be performed to create and deliver the offerings to consumers? d. why does the business model create value?

what activities need to be performed to create and deliver the offerings to consumers?

When does a merge between companies typically occurs? a. when to firms of comparable size join to form a combined entity b. when two or more firms enter a temporary vertical strategic alliance c. when a target firm does not want to be acquired d. when large, incumbent firms buy start up companies

when to firms of comparable size join to form a combined entity