chapter 1: strategic leadership: managing the strategy-making process for competitive advantagechapter 1 - strategic leadership: managing the strategy-making process for competitive advantage1、which of these principal factors helps increase shareholder value?
a、profitability.
b、risk factors.
c、low brand awareness.
d、government regulations.
e、high production costs.
2、which of the following statements is true about competitive advantage?
a、it is unaffected by the strategies taken by the company.
b、it is considered to be sustained when it lasts for three months.
c、it exists only when the company's profitability is greater than the ten highest grossing firms in the world.
d、it exists only when the company's profitability is greater than the average profitability and profit growth of its rivals.
e、it is seldom affected by the business model of the company.
3、which of the following best defines shareholder value?
a、it refers to the returns that shareholders earn from purchasing shares in a company.
b、it refers to the capital invested in a company by the shareholders.
c、it refers to the efforts taken by a company to sell its shares to prospective shareholders.
d、it refers to the efforts taken by a company to buy back its shares from its shareholders.
e、it refers to the non-monetary benefits that a company provides to its shareholders.
4、daryl works for delta corp. he is involved in all of the important decision-making processes of the company and is also responsible for the overall performance of the company. in the context of strategic management, daryl is most likely to be a _____.
a、line manager
b、functional manager
c、general manager
d、production supervisor
e、project manager
5、which of the following dimensions is encompassed by a company's business model?
a、configuring resources
b、avoiding focus on acquiring new customers
c、reducing emphasis on product quality
d、maintaining high costs
e、restricting growth
6、between 2005 and 2011, blue drinks, a multinational beverage corporation, increased its return on investment from $5 million to $25 million. the company was able to do this by expanding its product line to include a wider variety of flavors. the $20 million increase in its return on investment between 2005 and 2011 can be referred to as which of the following?
a、shareholder value
b、dividend payment
c、profit growth
d、profitability turnover
e、risk capital
7、which of the following statements is true about nonprofit organizations?
a、they compete with each other for resources.
b、their ultimate aim is to maximize shareholder value in order to attract risk capital.
c、their managers do not need to develop careful strategies, because making a profit is not the organization's goal.
d、they do not have to worry about exceeding budgets.
e、they seldom set any performance goals like profit-making organizations do.
8、which of the following statements is true about strategic leadership?
a、it is the primary responsibility of the functional managers of an organization.
b、it does not take into account the task of maximizing shareholder value.
c、it is involved with making decisions regarding how to create a competitive advantage.
d、it is a concept that does not apply to multidivisional companies with several business units.
e、it is essentially about supervising workers at a manufacturing unit of an organization.
9、_____ refers to the investment that shareholders make in a company that cannot be recovered if the company fails and goes bankrupt.
a、profitability
b、shareholder value
c、debt
d、risk capital
e、dividend payments
10、which of the following is the organization's principal general manager?
a、line manager
b、marketing division head
c、cfo
d、ceo
e、sales manager
11、within a diversified company, the responsibilities of corporate-level strategic managers include:
a、supervising production at the manufacturing units of the company.
b、compiling sales reports, company costs, employee productivity and calculating the employee turnover rate.
c、responding to employee complaints on a daily basis.
d、providing leadership for the entire organization and allocating resources among its different business areas.
e、maintaining records of transactions with suppliers.
12、philip oversees the processes of the research and development department of his company. he is responsible for all of the activities and tasks undertaken by the department. in the context of strategic management, philip is most likely to be a _____.
a、corporate-level general manager
b、functional manager
c、managing director
d、ceo
e、business development manager
13、in the context of strategic management of a company, _____ have profit-and-loss responsibility for a product, a business, or the company as a whole.
a、line managers
b、functional managers
c、general managers
d、government regulators
e、marketing managers
14、which of the following statements is true about functional-level managers?
a、they oversee the operation of an entire company or division.
b、their sphere of responsibility is generally confined to one organizational activity.
c、their activities and roles have no importance in realizing the strategic goals of an organization.
d、they provide a link between the people who oversee the strategic development of a firm and those who own the firm.
e、they occupy the apex of decision-making within an organization.
15、roza munoz oversees the overall operations of maxwell coffee house which is one of the divisions of kraft foods company. roza is also responsible for the overall performance of the business division. which of the following is not likely to be one of roza's responsibilities?
a、turning corporate-level strategy into action
b、defining kraft food’s mission statement
c、deciding how to compete in the coffee industry
d、supervising functional-level managers
e、developing a business-level strategy
16、the first component of the strategic management process is:
a、crafting the organization’s mission statement.
b、coming up with a damage control plan.
c、analyzing the macroenvironment.
d、determining the firm's employee turnover rate.
e、deciding on a fit between the organization's strengths and weaknesses and the environment's opportunities and threats.
17、strategy formulation refers to the:
a、task of executing corporate- and business-level plans.
b、process by which strategies are put into action.
c、design of organizational structures and control systems.
d、implementation of emergent strategies.
e、analyzing an organization's external and internal environment and then the process of selecting an appropriate strategy.
18、beta corp., a gaming software company, recently launched a new game. the target audience identified by the company was the age group of 12-18 years. the advertising and marketing strategies were designed exclusively to target this age group. however, sales data revealed individuals who belong to the age bracket 18-25 years were the ones who actually bought the game. the managers at beta corp. decided to redesign their marketing strategies to position the game as something that people of all ages would enjoy. the company's decision to modify its product positioning demonstrates:
a、downsizing strategy.
b、emergent strategy.
c、deliberate strategy.
d、concurrency control strategy.
e、unrealized strategy.
19、which of the following is not a characteristic of well-constructed goals?
a、they provide a means by which the performance of managers can be evaluated.
b、they are lengthy and wordy.
c、they specify a time period.
d、they are challenging but realistic.
e、they address critical issues.
20、a company, at its inception, states that its goal is “to provide the best customer service possible.” which of the following best describes this objective?
a、the company’s emergent strategy
b、the company’s corporate structure
c、the company’s hr strategy
d、the company’s mission statement
e、the company’s damage control plan
21、a strategy can be defined as a set of related actions that managers take to increase their company's performance.
22、strategic leadership is concerned with how to most effectively manage a company's strategy-making process to create competitive advantage.
23、to increase shareholder value, managers must try to venture into new markets whether the results are profitable or not.
24、a firm obtains competitive advantage when its strategy results in superior performance compared to its competitors.
25、roic is a measure of how efficiently and effectively managers use the capital at their disposal to produce profitability.
26、the profit growth of a company can be measured by the increase in net profit over time.
27、a business model is managers' conception of how the set of strategies their company pursues should mesh together into a congruent whole, thus enabling the company to gain a competitive advantage and achieve superior profitability and profit growth.
28、one of the factors that distinguish organizations in the nonprofit sector from profit-making businesses is the lack of a need for strategic management.
29、general managers bear responsibility for the overall performance of the company or for one of its major self-contained subunits or divisions.
30、the ceo is a company's principal general manager.
31、the final component of the strategic management process is crafting the organization's mission statement, which provides the framework or context within which strategies are formulated.
32、the concepts vision and mission can be used interchangeably.
33、the mission of a company lays out some desired future state and articulates what the company would like to achieve.
34、the values of a company state how managers and employees should conduct themselves.
35、a swot analysis is implemented to fine-tune strategies.
36、the comparison of strengths, weaknesses, opportunities, and threats is normally referred to as a swot analysis.
37、emergent strategies arise from within the company as a result of prior planning.
38、rules of thumb, or heuristics, always help to avoid severe and systematic errors in the decision-making process.
39、research finds that leaders who exhibit a high degree of emotional intelligence tend to be significantly less effective than those who do not.
40、the great virtue of scenario planning is that managers must think outside of the box to anticipate what they might do in different situations.
chapter 2: external analysis: the identification of opportunities and threatschapter 2 - external analysis: the identification of opportunities and threats1、a group of firms manufactures writing implements such as pens, pencils, and markers. this group should be referred to as a(n):
a、substitute.
b、market segment.
c、service provider.
d、regulator.
e、industry.
2、a baking company has different product ranges like whole-wheat pizzas for the diet-conscious and rich cookies for children and youngsters. the company is catering to different groups of customers known as:
a、investors.
b、entrants.
c、sectors.
d、market segments.
e、substitutes.
3、an impact that the changing industry boundaries have had is that:
a、owners of companies can now define boundaries.
b、there is an increase in the number of competitors for companies.
c、technological changes do not affect companies anymore.
d、the pattern of customer needs does not affect companies anymore.
e、the number of product substitutes available for customers has reduced.
4、porter's five forces model did not recognize one force, which is:
a、the power of complement providers.
b、the risk of entry by potential competitors.
c、the intensity of rivalry among established companies within an industry.
d、the bargaining power of suppliers.
e、the threat of substitutes.
5、which of the following statements is true about potential competitors in an industry?
a、they threaten the profitability of established companies.
b、they are usually encouraged by established companies.
c、they find it easier to enter an industry when the entry barriers are high.
d、they find it easier to enter an industry when established companies have economies of scale.
e、they usually have an absolute cost advantage over established companies.
6、which of the following is not a barrier to entry?
a、economies of scale
b、brand loyalty
c、absolute cost advantages
d、high customer bargaining power
e、high customer switching costs
7、if economies of scale are an industry's primary entry barrier, a new entrant's major concern is:
a、its inability to counter brand loyalty that customers have for established companies in the industry.
b、the inferior quality of its products.
c、its inability to match the innovation of the established firm.
d、its inability to produce in sufficient volume to match the cost advantages of established producers.
e、its inability to get buyers to switch to its product.
8、which of the following industry structures consists of a large number of small or medium-sized companies, none of which is in a position to determine industry price?
a、fragmented industry
b、consolidated industry
c、oligopoly
d、monopoly
e、sector
9、which of the following is not a determinant of the extent of rivalry among established companies?
a、industry competitive structure
b、demand conditions
c、the cost structure of firms in an industry
d、exit barriers
e、the power of buyers
10、which of the following statements is true about complementors?
a、their impact on industries was first recognized by porter's five forces model.
b、they have little importance in high-technology industries.
c、they have the power to impact the sales of the industry to which they supply complement products.
d、they tend to increase the sales of the industry they are supplying complements to by producing fewer low-quality complement products.
e、they cannot gain enough power to extract profits from the industry to which they supply complement products.
11、which of the following statements is true about government regulations in the context of entry barriers of an industry?
a、government deregulation in an industry results in significant reduction in competition.
b、government regulation is not a major entry barrier for any industries.
c、falling entry barriers due to government deregulation results in higher competition and lower industry profit rates.
d、the threat of new entrants reduces when the government deregulates an industry.
e、companies that enjoy brand loyalty and have significant scale economies are the ones who face major threat of competition due to government deregulation.
12、_____ arise when a customer invests time, energy, and money shifting from the products offered by one established company to the products offered by a new entrant.
a、overhead costs
b、incremental costs
c、marginal costs
d、opportunity costs
e、switching costs
13、which of the following statements is true about rivalry in the context of established companies?
a、it significantly reduces the costs of established companies.
b、it squeezes profits out of an industry.
c、it enables companies to lower their spending on non-price-competitive strategies.
d、it forces companies to reduce prices when it is less intense.
e、it is unaffected by the demand conditions of an industry.
14、when shopping for clothing such as shirts and jeans, tyrone only buys products from eastern clothing company even if there are several other companies that offer similar products at lower prices. tyrone's preference for eastern clothing company demonstrates:
a、lack of demand.
b、bargaining power.
c、risk of entry.
d、brand loyalty.
e、lack of economies of scale
15、julian was asked to examine the demographic forces facing his employer, a clothing manufacturer. which of the following factors is julian most likely to examine?
a、government regulations
b、inflation
c、manufacturing technology
d、age of the population
e、society's growing interest in exercise
16、to determine its opportunities and threats, a firm should focus on internal processes and capabilities.
17、opportunities arise when a company can take advantage of conditions in its environment to formulate and implement strategies that allow it to become more profitable.
18、threats arise when conditions in the external environment endanger the integrity and profitability of a company’s business.
19、the bottled water industry created new competitors for coca-cola, but it did not change the basic industry boundaries.
20、in porter's competitive forces framework, the stronger the five forces, the ability of established companies to raise prices and earn greater profits becomes more limited.
21、substitute products are not a threat if a company is the market leader.
22、suppliers are most powerful when the products that they sell have many substitutes.
23、cost reductions gained through mass-producing a standardized output are a source of scale economies.
24、the risk of entry by potential competitors is a function of the height of the barriers to entry.
25、the more commodity-like that an industry's product is, the lower the intensity of any price war that may develop.
26、a group of firms all make tools for baking—pots, pans, measuring cups, and utensils. this group should be referred to as a market segment.
27、strong brand loyalty and high customer switching costs are low barriers to entering an industry.
28、growing demand tends to reduce rivalry because all companies can sell more without taking market share away from each other.
29、government deregulation of telephone service lowered the barriers to entry and lowered industry profit rates.
30、when buyers are in a weak bargaining position, companies in the industry must lower their prices to increase profits.
chapter 3: internal analysis: resources and competitive advantagechapter 3 - internal analysis: resources and competitive advantage1、which of the following is not true regarding a company's distinctive competencies?
a、they represent the unique strengths of the company.
b、they refer to company strengths that competitors cannot easily match or imitate.
c、they form the bedrock of a company's strategy.
d、they can be based in any of the value creation functions of the company.
e、they are shared by many firms in an industry.
2、which of the following is true of the impact of high product quality on competitive advantage?
a、it decreases the utility of the products.
b、it lowers unit costs of the products.
c、it adversely affects employee productivity.
d、it limits the company's ability to differentiate its products.
e、it increases the need for after sales services.
3、donna can make a chair for about $100, she charges customers $150 to buy the chair, and customers perceive that the chair is worth $225. in this case, the consumer surplus is:
a、$50.
b、$75.
c、$125.
d、$150.
e、$225.
4、kodak possesses the leading imaging technology. this technology has allowed the company to differentiate its products from those offered by rivals. imaging technology is kodak’s:
a、distinctive competence.
b、profit.
c、support activity.
d、value chain.
e、retired product.
5、which of the following is an important attribute for a product from a quality-as-reliability perspective?
a、styling
b、aesthetic appeal
c、wait time at the point of sale
d、features
e、performance
6、intel’s invention of the microprocessor in the early 1970s, cisco’s development of the router for routing data over the internet in the mid-1980s, and apple’s development of the ipod, iphone, and ipad in the 2000s can be referred to as _____ innovations.
a、process
b、product
c、customer
d、sector
e、absorptive
7、which of the following best describes product innovation?
a、transforming a quantity of inputs into a given output
b、identifying and satisfying a customer's needs
c、creating products that have superior attributes than existing products.
d、developing a new process that focuses on quantity rather than quality.
e、measuring the quantity of outputs produced per employee
8、which primary activity in the value chain is concerned with the design of products and production processes?
a、research and development
b、marketing and sales
c、materials management
d、production
e、company infrastructure
9、using the value chain model, which of the following primary activities is performed first, as inputs are transformed into outputs?
a、research and development
b、marketing and sales
c、logistics
d、production
e、service and support
10、ford motors developed the explorer sports utility vehicle in 1990, and it is still in the top ten best-selling sports utility vehicles in the united states, based on an extensive study of customer preferences. which value chain activity of ford conducted those studies?
a、research and development
b、human resources
c、materials management
d、marketing and sales
e、company infrastructure
11、mike works as a corporate trainer, teaching new employees how to perform manufacturing tasks. in which value chain activity does mike work?
a、research and development
b、human resources
c、materials management
d、production
e、company infrastructure
12、cost accountants are responsible for gathering and monitoring data used for controlling the organization's costs. in which value chain activity do cost accountants work?
a、research and development
b、human resources
c、materials management
d、marketing and sales
e、company infrastructure
13、which of the following support activities in the value chain refers to the transmission of physical materials from procurement through production and into distribution?
a、human resources
b、information systems
c、research and development
d、logistics
e、operations
14、ray, a toymaker, knits a stuffed unicorn for belle. which function of the value chain is illustrated in this scenario?
a、marketing
b、distribution
c、research
d、production
e、sales
15、dale's methods of fitting horseshoes save time and money for his employer at the local ranch. however, when dale suggests that everyone use his method, his boss, cedric, says, "no. that's not the way we've always done it around here." cedric's resistance to change illustrates:
a、organizational inertia.
b、prior strategic commitments.
c、barriers to mobility.
d、lack of distinctive competencies.
e、the icarus paradox.
16、internal analysis is concerned with identifying a company's opportunities and threats.
17、together with an analysis of the company's external environment, internal analysis gives managers the information they need to choose the business model and strategies that will enable their company to attain a sustained competitive advantage.
18、distinctive competencies are firm-specific strengths that allow a company to differentiate its products and achieve substantially lower costs than its rivals.
19、the more a resource is firm-specific and difficult to imitate, the more likely a company holding that resource is said to have a distinctive competency.
20、the price a company charges for a good or service is typically more than the utility placed on that good or service by the customer.
21、lucy is an entrepreneur who is interested in opening her own bakery. she is concerned with obtaining money for equipment for the bakery such as ovens, pots and pans, and display cabinets. lucy is trying to obtain intangible resources for her business.
22、the building blocks of competitive advantage are efficiency, quality, innovation and customer responsiveness.
23、the vrio model is designed to help companies assess the quality of their resources and identify sources of competitive advantage.
24、resources can be considered valuable if they enable a company to create a strong demand for its products or if it reduces the costs of producing its products.
25、the importance of reliability in building competitive advantage has increased dramatically over the past several decades.
26、nene works in a factory where she picks crab meat from crabs. she is paid per day based upon the number of pounds of crab meat that she picks. nene’s daily number of pounds of crab meat can be referred to as her productivity.
27、in the fashion industry, the time required to take a new product from design inception to placement in a retail store is known as customer response time.
28、a company's profitability depends on the value customers place on the company's products and a company's ability to reduce its production costs.
29、the ability of established competitors to imitate the competitive advantage of a rival is limited by factors such as existing strategic commitments and low absorptive capacity.
30、benchmarking is a practice in which a company's performance is compared against that of other companies in different industries.
chapter 4: building competitive advantage through functional-level strategieschapter 4 - building competitive advantage through functional-level strategies1、one of the primary roles of research and development in achieving superior efficiency is:
a、facilitating cooperation among functions.
b、limiting customer defection rates by building brand loyalty.
c、designing products for ease of manufacture.
d、instituting training programs to build skills.
e、implementing pay for performance.
2、managers should not become complacent about efficiency-based cost advantages because:
a、both learning effects and economics of scale go on forever.
b、the experience curve is likely to bottom out at some point.
c、cost advantages gained from experience effects are not affected by the development of new technologies.
d、unit costs keep reducing as output increases.
e、the experience curve steadily rises after a certain threshold is reached indicating an increase in unit costs.
3、research suggests that the adoption of _____ may increase efficiency and lower unit costs relative to what can be achieved by the mass production of a standardized output.
a、just-in-time manufacturing
b、quick technology
c、flexible production technology
d、stable production
e、unscheduled manufacturing
4、____ refers to unit cost increases associated with a large scale of output.
a、economies of scale
b、learning effects
c、diseconomies of scale
d、flexible manufacturing
e、mass customization
5、learning effects:
a、result in unit manufacturing costs increasing by a certain amount each time output is increased.
b、suggest that production costs increase because of increasing labor productivity.
c、are more significant when simple steps in an assembly process are performed over and over again.
d、are more significant when a technologically complex task is repeated.
e、lead to diseconomies of scale.
6、which of the following is a tactical step for getting down the experience curve ahead of competitors?
a、premium pricing to create an image of uniqueness in consumers' minds
b、pursuing a distinctive competence in focused marketing
c、constructing a manufacturing plant of less than minimum efficient scale
d、using aggressive pricing and promotions to expand sales volume as rapidly as possible
e、making the assembly of the product as complex as possible because this results in greater learning effects
7、with regard to customer defection, which of the following statements is incorrect?
a、defection rates are determined by customer loyalty.
b、the longer a company holds on to a customer, the greater is the volume of customer-generated unit sales.
c、lowering customer defection rates creates a higher cost structure.
d、the longer a company retains a customer the higher the average unit cost of each sale.
e、there is a positive relationship between the length of time that a customer stays with the company and profit per customer.
8、the mountain ski lodge spent $100,000 marketing and advertising its new ski trails and on-site spa. the money used for marketing and advertising can be referred to as:
a、variable costs.
b、fixed costs.
c、ratio costs.
d、diseconomies of scale.
e、economies of scale.
9、cream cups bakes cakes in several varieties dedicated to special occasions. it also allows its customers to personalize the cakes according to their personal preferences. this is an example of:
a、learning effects.
b、just-in-time inventory.
c、customer defection.
d、mass customization.
e、diseconomies of scale.
10、which of the following is not one of the principles commonly found in companies that have successfully embraced the tqm philosophy?
a、building an organizational commitment to quality
b、finding ways to measure quality
c、giving more time for supervisors to work with employees
d、training new employees
e、defining work standards only in terms of numbers or quotas
11、which of the following is not a role played by infrastructure leadership in implementing reliability improvement methodologies?
a、providing leadership and commitment quality
b、finding ways to manage quality
c、setting goals and creating incentives
d、soliciting input from employees
e、lengthening production runs
12、which of the following is the first step in the five-step chain reaction, as articulated by deming, with regard to the philosophy underlying tqm ?
a、improvement in productivity
b、increase in a company's profitability
c、higher market share due to superior quality of products
d、reduction of costs due to improved quality
e、creation of more jobs
13、which of the following is not a benefit of tight cross-functional integration among research and development (r&d), production, and marketing?
a、new products are designed for ease of manufacture.
b、development costs are kept in check.
c、product development projects are driven by company innovations.
d、time to market is minimized.
e、customer needs are considered in the product development process.
14、a video game console manufacturer hired scientists and engineers to work on ways to improve the video cards used in their game systems. the main aim of the manufacturer was to enhance the utility of the products, as perceived by the customers, above that of its rivals. this company aims to:
a、achieve superior innovation.
b、maintain a low cost position.
c、increase response time.
d、achieve a greater division of labor.
e、minimize the time to market.
15、cool looks, inc. is a local fashion design company that actively solicits comments from its customers about the quality of its clothing and the kind of merchandise they want it to supply. which of the following mechanisms for focusing on the customer is cool looks utilizing?
a、managing materials
b、improving response time
c、demonstrating leadership
d、shaping employee attitudes
e、knowing customer needs
16、functional strategies play only a small role in organizational success because they occur at a low level in the firm.
17、distinctive competencies shape the functional-level strategies that a company can pursue.
18、the concept of economies of scale suggests that unit costs continue to fall indefinitely as output volume increases.
19、no matter how complex the task is, learning effects typically die out after a limited period of time.
20、all else being equal, if a company moves down the experience curve faster than its rivals, it should realize a lower cost structure.
21、flexible production technologies allow a company to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output
22、mass customization describes the ability of companies to use flexible manufacturing technology to reconcile the two goals of low cost and differentiation through product customization.
23、there is a negative relationship between the length of time that a customer stays with a company and profit per customer.
24、when amber first started working at a car manufacturing plant assembling car doors, she was slower at the task than her co-workers. as time passed, her speed at assembling the doors increased and she even taught others how to perform the task more quickly. as a result of increased employee productivity, this particular plant experienced cost savings. these cost savings can be attributed to learning effects.
25、through efficient logistics at grasshopper grocers, the stock in the stores is automatically replenished when the company receives an alert from customers that their stock is low. management at grasshopper grocers uses a just-in-time inventory system.
26、sherree works at dustcloud manufacturing where she is part of a seven member team. her team coordinates its own activities as well as makes its own hiring, training, work, and reward decisions. this type of team is referred to as a virtual team.
27、six sigma is a quality and efficiency program derived from the concept of total quality management, and was widely used in japan before acceptance in the u.s.
28、product attributes that collectively define product excellence include the form, features, performance, durability, and styling of the product.
29、six sigma encompasses the activities necessary to get inputs and components to a production facility, through the production process, and out through a distribution system to the end user.
30、production and materials-management functions need not be changed in response to unanticipated customer demands as they do not affect response time.
chapter 5: business-level strategychapter 5 - business-level strategy1、which of the following generic competitive strategies is a producer of commodity steel most likely to pursue?
a、exclusive dealing
b、broad differentiation
c、focus differentiation
d、broad low-cost
e、horizontal integration
2、cool looks produces a variety of clothing for various customer groups. which of the following strategies is the firm most likely pursuing?
a、cost leadership
b、differentiation
c、product substitution
d、focus
e、share building
3、when a company produces a wide range of products for various customer groups, it is following a _____ strategy.
a、cost leadership
b、differentiation
c、customer retention
d、market concentration
e、share building
4、compared to a differentiator, the company that follows a low-cost strategy:
a、distinguishes its products from those of rivals by offering something that they find hard to match.
b、absorbs cost increases by powerful suppliers while keeping to their lower pricing.
c、allows the company to charge a premium price for its good or service.
d、uses perceived superior value to generate growth in demand among customers.
e、creates entry barriers for rivals with greater brand loyalty to the specific products offered.
5、when a company recognizes that the needs of one market segment is not the same as another and accordingly customizes its product offerings, it is said to be pursuing:
a、stuck-in-the-middle strategy.
b、rapid-growth strategy.
c、differentiation strategy.
d、focus strategy.
e、low-cost strategy.
6、which of the following is not a main approach to market segmentation?
a、marketing a product targeted toward average or typical customers
b、marketing a product to a group of people who are more likely to purchase it
c、making customized products to suit the unique requirements of customers
d、making products to meet the specific needs of a narrow group of customers
e、making one product aimed toward a general, rather than a specific subset of customers
7、the main difference between companies following a broad low-cost strategy and those following a focus low-cost strategy is in the:
a、standardized market price.
b、industry life cycle stage.
c、degree of market segmentation.
d、age of the market.
e、market trajectory.
8、a company that follows the _____ strategy customizes its offering to a particular niche in order to outsell its rivals.
a、focused differentiation
b、broad low-cost
c、market standardization
d、rapid growth
e、stuck in the middle
9、lucy’s swimwear boutique offers swimwear that is targeted at affluent people who can afford to buy expensive, handmade swimsuits. which of the following approaches to market segmentation is lucy’s swimwear boutique using?
a、broad differentiation strategy
b、low market segmentation
c、medium market segmentation strategy
d、broad high-cost strategy
e、focus differentiation strategy
10、at the luxury hotel in miami, florida, three hotel employees serve the needs of each guest. in every room, a guest can summon a chef, a maid, or a valet by pressing a button at his/her bedside. which generic business-level strategy is the luxury hotel utilizing?
a、cost leadership
b、differentiation
c、vertical integration
d、razor and blade
e、brand loyalty
11、delta airlines used to advertise its high-quality air travel service by saying it flew "anywhere, anytime." what generic strategy is represented by this advertisement?
a、broad low-cost
b、broad differentiation
c、vertical integration
d、right-time marketing
e、rapid growth
12、which of the following statements is true of differentiation and cost structure?
a、differentiation and cost structure decisions affect one another.
b、differentiation and cost structure decisions do not affect one another.
c、companies that focus on the higher-value end of the market have a lower cost structure.
d、differentiation decisions do not affect a company's profitability.
e、cost structure decisions do not affect a company's profitability.
13、nick, a professional magician, is often invited to perform magic tricks at birthday parties and other social gatherings from across the country. however, he offers his services only to clients who stay in the same city as him. he is also known to charge less than other magicians in the city. nick is pursuing which generic business strategy?
a、improved services
b、right-time marketing
c、focused low-cost
d、broad low-cost
e、deterrence strategy
14、yankee candle company offers customers candles that burn for 50-60 hours, much longer than most department store candle brands. therefore, customers are willing to pay a higher price for these candles. which of the following strategies is yankee candle company following?
a、cost leadership
b、rapid growth
c、market segmentation
d、differentiation
e、stuck in the middle
15、which of the following generic business-level strategies is based on the intent to lower costs so that a company can lower prices and still make a profit?
a、broad low-cost strategy
b、price differentiation strategy
c、broad differentiation strategy
d、focused differentiation strategy
e、focused low-cost strategy
16、a firm's business model should contain three components: what is to be satisfied, who is to be satisfied, and how they will be satisfied.
17、the way a product is differentiated from other products of its type and the price of the product determine which product a customer chooses to satisfy his or her needs.
18、in commodity markets, competitive advantage goes to the company that has the lowest costs.
19、market segmentation refers to the process of subdividing a market into clearly identifiable groups of customers with similar needs, desires, and demand characteristics.
20、differentiation leads to high brand loyalty, which in turn significantly increases the threat of new firms entering the industry.
21、a generic business-level strategy is a strategy that gives a company a specific form of competitive position and advantage over its rivals that results in above-average profitability.
22、an efficiency frontier shows all of the different positions that a company can adopt with regard to differentiation and cost.
23、mike's eatery, a fast food chain, neither customizes its product offerings nor sells new products based on market segments. mike's eatery is pursuing standardization strategy.
24、when a company already has a low-cost structure, it has to give up a lot of differentiation in its product offering to get additional cost reductions.
25、the brand loyalty enjoyed by the differentiated company will not always protect it from substitute goods and services.
26、companies that follow a standardization strategy ignore the many different market segments in an industry and position their products to appeal to the average customer.
27、by focusing on a niche, and customizing the offering to that segment, a differentiated company can often outsell differentiated rivals that target a broader market.
28、actions taken at the functional level should support the business-level strategy, as should the organizational arrangements of the enterprise.
29、when a company targets a certain segment or niche, and tries to be the low-cost player in that niche, it is pursuing a broad low-cost strategy.
30、standardization describes what happens when innovation pushes out the efficiency frontier in an industry, allowing for greater value to be offered through superior differentiation at a lower cost than was previously thought possible.
chapter 6: business-level strategy and the industry environmentchapter 6 - business-level strategy and the industry environment1、the real estate industry is comprised of different firms in several locations. some are independent and popular locally, while others are affiliated to national chains. the real estate industry is most likely to be a(n):
a、fragmented industry.
b、oligopolies industry.
c、pure competition industry.
d、consolidated industry.
e、monopoly.
2、which of the following statements is true about fragmented industries?
a、they are usually characterized by large mass-production operations.
b、they essentially enjoy a national brand loyalty.
c、they require companies to use focus strategies to meet specialized customer needs.
d、they do not attract new entrants as they have extremely high entry barriers due to economies of scale.
e、they are usually dominated by one or two large companies that enjoy the power to influence industry prices.
3、which of the following is an advantage of franchising?
a、it gives the franchisor the same level of tight control over franchisees as does chaining.
b、it allows the franchisor to earn all of the profits made by franchisees.
c、it is beneficial for franchisees because they do not have to face higher capital costs.
d、it helps the franchisees by relieving them of the responsibility of running operations.
e、it can help the franchisor expand his or her business rapidly.
4、which of the following is a disadvantage of franchising?
a、it restricts the franchisor from expanding.
b、it results in the franchisor taking all the financial burden of the franchisees.
c、it results in the delegation of authority to franchisees, and the franchisor may not enjoy complete control.
d、it does not provide sufficient incentive to the franchisees to run operations effectively because franchisees are not entrepreneurs.
e、it requires the franchisees to create a new business model and plan strategies.
5、which of the following statements is true about horizontal mergers?
a、horizontal mergers enable companies to achieve economies of scale.
b、horizontal mergers result in the fragmentation of the industry.
c、the horizontal merger strategy has been very successful in businesses with zero cases of failure.
d、companies that establish a network of distributor outlets to obtain the advantages of a low-cost postition are known as horizontal mergers.
e、companies that adopt the strategy of centralization to gain control over all business units are known as horizontal mergers.
6、to compete in the fragmented restaurant industry, starbucks built, and now operates hundreds of restaurants across the united states and canada. which of the following strategies is starbucks using ?
a、acquisitions
b、horizontal mergers
c、franchising
d、licensing
e、chaining
7、a company uses _____ when it focuses on pockets of demand that are declining more slowly than the industry as a whole to maintain profitability.
a、acquisition strategy
b、chaining
c、divestment strategy
d、niche strategy
e、franchising
8、in a bid to expand its business and gain cost advantages, omega inc. has established several merchandising outlets in different locations. all the outlets share a good network and are interconnected by information technology. the entire network of outlets operates in the industry as one large company. which of the following strategies has omega inc. most likely used ?
a、chaining
b、franchising
c、horizontal merger
d、niche strategy
e、divestment strategy
9、hydralicious, a juice bar, has been looking to expand its business. the company has given a few entrepreneurs in different locations the license to operate under its name.the entrepreneurs have permission to use the company's reputation and the business model to run operations. the entrepreneurs will be charged a fee, but they will also get a percentage of the profits. which of the following strategies is hydralicious most likely to be using ?
a、chaining
b、horizontal merger
c、vertical merger
d、franchising
e、centralization
10、which of the following statements is true of embryonic industries?
a、they are characterized by very a high initial customer demand.
b、they are characterized by well-developed distribution channels.
c、they involve low production costs because of large volumes of production.
d、they face the challenge of educating customers who are not familiar with their product benefits.
e、they enjoy the abundance of complementary products that help increase sales.
11、factors leading to the slow growth of demand in embryonic industries include all of the following except the:
a、poor quality of the first products.
b、lack of complementary products.
c、customer passion for the products.
d、high production costs of the products.
e、lack of distribution channels for the products.
12、customers who have a practical interest in using a new technology in the future and who are willing to experiment and envision new uses for the technology are called:
a、early adopters.
b、the early majority.
c、innovators.
d、laggards.
e、the late majority.
13、which of the following customer groups represents the leading wave or edge of the mass market?
a、early adopters
b、early majority
c、innovators
d、late majority
e、laggards
14、which of the following factors of a particular product tends to accelerate customer demand for it?
a、high observability
b、minimum relative advantage
c、high complexity
d、minimal value
e、low trialability
15、who among the following is most likely to fall under the category of laggards in the context of customer groups?
a、lauren is tech-savvy and tends to actively seek out for new and innovative products in the market.
b、suresh appreciates technology but tends to refrain from trying products that are extremely new.
c、phillip is ignorant about the newest uses of technology and buys new products only when they become an absolute necessity.
d、charlotte is aware of the value that technology offers; she tends to weigh costs and benefits of a product before making a buying decision.
e、maria tends to be a little apprehensive about buying new technology but buys nevertheless when he observes that a lot of people are using the new technology.
16、a fragmented industry is composed of a large number of small and medium-sized companies.
17、by their choices of competitive actions and decisions about product attributes, managers can speed up or slow down the rate of progress of an industry through the stages of the industry life cycle.
18、relish inc. created the first national chain of fast-food restaurants in a previously fragmented industry. this is called divestment.
19、through chaining, companies increase their buying power, which allows them to negotiate large price reductions with their suppliers, which in turn promotes their competitive advantage.
20、the challenge in a fragmented industry is to figure out the best set of strategies to overcome a fragmented market so that the competitive advantages associated with pursuing one of the different business models can be realized.
21、a new product's relative advantage refers to the degree to which a new product is perceived as better at satisfying customer needs than the product that it supersedes.
22、one characteristic of embryonic industries is unconventional and specialized distribution channels.
23、early adopters are customers who purchase a new technology or product only when they are convinced that it will be around for a long time.
24、the late majority customers are typically reached through specialized distribution channels, and products are often sold by word of mouth.
25、laggards are technologically sophisticated customers willing to tolerate the limitations of the product.
26、the goal for companies in the growth stage of the industry life cycle is to maintain its relative competitive position in a rapidly expanding market.
27、in the embryonic stage of the industry life cycle, a company's investment needs and production costs are low.
28、a technology upgrading strategy is utilized by incumbent companies in a mature industry to deter entry by investing in costly upgrades that potential entrants would have trouble matching.
29、product proliferation refers to the strategy of filling the niches by catering to the needs of customers in all market segments.
30、a limit price strategy involves charging a price that is lower than that required to maximize profits in the short run, but is above the cost structure of potential entrants.
chapter 8：strategy in the global environmentchapter 8：strategy in the global environment1、which of the following is not an attribute of a national or country-specific environment that has an impact on global competitiveness of companies located in that nation?
a、factor endowments
b、local demand conditions
c、related and supporting industries
d、strategy, structure, and rivalry of firms within the nation
e、advertising expenses
2、which of the following statements is true in the context of local demand conditions?
a、companies are typically least sensitive to the needs of their closest customers.
b、home demand plays little role in helping companies upgrade their national competitive advantage.
c、a nation’s companies gain competitive advantage if their domestic customers are sophisticated and demanding.
d、the characteristics of international demand alone shape the attributes of a company's products; not local demand.
e、local demand characteristics have little role to play in creating pressure for innovation and quality.
3、which of the following is not a factor of production?
a、land
b、labor
c、raw materials
d、competitive forces
e、managerial sophistication
4、black and decker, capitol one, gillette, and unilever are all companies that conduct business in two or more national markets. these companies are known as:
a、bimarket companies.
b、national companies.
c、domestic companies.
d、multinational companies.
e、localized companies.
5、which of the following statements is true in the context of attributes of national competitive advantage?
a、factor endowments do not encompass aspects such as managerial sophistication.
b、companies are typically least sensitive to the needs of their closest customers.
c、the benefits of investments in advanced factors of production by related and supporting industries are confined to those industries.
d、domestic rivalry creates pressures to increase costs and avoid investing in upgrading advanced factors.
e、the nature of home demand shapes the attributes of domestically made products .
6、swedish strength in fabricated steel products (such as ball bearings and cutting tools) has drawn on strengths in sweden’s specialty steel industry. this is an example of which of the following attributes that impact national competitive advantage?
a、local demand conditions
b、competitiveness of related and supporting industries
c、intensity of rivalry in an industry
d、factor endowments
e、differences in distribution channels
7、which of the following statements is true in the context of globalization of production and markets?
a、globalization of production has significantly increased the costs for many industries.
b、the globalization of markets and production has failed to threaten companies' home markets.
c、consolidated oligopolies continue to be dominated by a small number of companies despite globalization.
d、the shift from national to global markets has curbed competitive rivalry in many industries.
e、globalization has significantly increased the threat of entry.
8、strong pressures for convergence due to a shared history and culture, or the establishment of a trading block where there are deliberate attempts to harmonize trade policies, infrastructure, and regulations have contributed to the rise in what trend?
a、regionalism
b、globalization
c、monopolies
d、nationalism
e、traditional practices
9、when a company grows its sales volume through international expansion, it can realize cost savings from economies of scale through all of the following except:
a、spreading fixed costs over its global sales volume.
b、utilizing its production facilities more intensely.
c、increased bargaining power with its suppliers.
d、learning effects associated with higher volume.
e、adopting high cost structures.
10、when a company performs a value creation activity in a region that is optimal for that activity, wherever in the world that might be, it is trying to capitalize on:
a、negative feedback loops.
b、economies of scope.
c、the transnational strategy.
d、location economies.
e、its localization strategy.
11、which of the following is not a necessity for leveraging the competencies of global subsidiaries?
a、incentives for local managers to share knowledge and ideas
b、awareness among managers that competencies can develop anywhere
c、assertion of monopoly of the corporate center over subsidiaries
d、transfer of competencies around the company
e、incentives that encourage employees to take necessary risks
12、which of the following factors increases pressures for cost reductions?
a、meaningful differentiation between products
b、reduced international competition
c、competitors that are based in high-cost locations
d、high switching costs
e、persistent excess capacity
13、host government demands generally:
a、increase pressures for local responsiveness.
b、decrease pressures for cost reductions.
c、do not encompass local content rules.
d、compel companies to abandon localization strategies.
e、impede a company's ability to differentiate its product offering across national borders.
14、in the wireless telecommunications industry, different technical standards are found in different parts of the world. a technical standard known as gsm is common in europe, and an alternative standard, cdma, is more common in the united states and parts of asia. equipment designed for gsm will not work on a cdma network and vice versa. which of the following pressures for local responsiveness does this represent?
a、global environmental demands
b、host government demands
c、differences in distribution channels
d、differences in customer tastes and preferences
e、differences in infrastructure
15、nutrimax, a sports foods manufacturer, has recently expanded its operations to different countries. the company has realized that customers in different countries have different tastes and preferences. so, the company customizes its products based on the country where it's selling. in this scenario, nutrimax is most likely to be using _____ strategy.
a、global standardization
b、localization
c、achilles heel
d、centralization
e、transnational
16、the globalization of production has been decreasing as companies have been facing lower barriers to international trade and location economies.
17、despite the globalization of production and markets, many of the most successful companies in certain industries are still clustered in a small number of countries.
18、factor endowments, the cost and quality of factors of production, are a prime determinant of the competitive advantage that certain countries have in certain industries
19、starbucks, sony, and coca-cola conduct business in two or more countries. these companies can be referred to as multinational companies.
20、a company can increase its growth rate by taking goods or services developed at home and selling them internationally.
21、location economies refer to the economic benefits that arise from performing a value creation activity at an optimal location.
22、a company may create value if it can leverage the competencies created within subsidiaries and apply them to other operations within the firm's global network.
23、by offering a standardized product to the global marketplace and manufacturing that product in each nation in which it does business irrespective of production costs, a multinational company can realize substantial scale economies.
24、an international strategy may not be viable in the long term, but companies that can pursue it need to shift toward a global standardization strategy to survive.
25、a localization strategy is most appropriate when there are substantial differences across nations with regard to consumer tastes and preferences and when cost pressures are not too intense.
26、company leaders that pursue a global standardization strategy are trying to develop a business model that simultaneously achieves low costs and differentiates the product offering across geographic markets.
27、if a company's competitive advantage derives from its control of proprietary technological know-how, it should either license its technology to others or pursue a joint venture.
28、strategic alliances can be designed to make it difficult (if not impossible) to transfer technology that is not meant to be transferred.
29、most manufacturing companies begin their global expansion by exporting.
30、a transnational strategy makes the most sense when demand for local responsiveness is minimal.
chapter 9：corporate-level strategy: horizontal integration, vertical integration, and strategic outsourcingchapter 9 - corporate-level strategy: horizontal integration, vertical integration, and strategic outsourcing1、the final part of the strategy formulation process is:
a、choosing business-level strategies.
b、choosing functional-level strategies.
c、choosing corporate-level strategies.
d、choosing functional-level goals.
e、choosing business-level goals.
2、when a company decides to expand into new industries, it must:
a、develop "multibusiness model" that justifies its entry into different businesses.
b、halt marketing activities in the current industry to avoid being associated with one specific industry.
c、select a new ceo and reappoint the board of directors.
d、create one common business model for all the industries rather than each business unit.
e、avoid talking about ways of increasing profitability in the business model.
3、_____ is the process of acquiring or merging with industry competitors to achieve the competitive advantages.
a、tapered integration
b、vertical integration
c、horizontal integration
d、franchising
e、diversification
4、horizontal integration may be thought of as:
a、moving into a new unrelated industry.
b、giving control to suppliers.
c、gaining control of distributors.
d、staying inside the industry in which the company currently operates.
e、combining functional units within the company.
5、which of the following is a benefit that firms should expect to gain from the use of horizontal integration?
a、reduced risk of coming into conflict with the ftc
b、better realization of economies of scale
c、greater control over the entire supply chain
d、reduced risk of holdup
e、reduced need for investment in core activities
6、horizontal integration in an industry tends to:
a、increase the cost structure.
b、increase product differentiation.
c、undermine the company's competitive advantage.
d、increase rivalry within the industry.
e、reduce bargaining power over suppliers and buyers.
7、adam's boss tells him that their company is pursuing the strategy of horizontal integration. which of the following is true of this scenario?
a、the company will acquire one of its suppliers.
b、the company will buy or merge with one of its rivals.
c、the company will begin to distribute its own products.
d、the company will change the organizational structure to make it more flat.
e、the company will merge with another company that belongs to a different industry.
8、a leading software company merged with its competitor to form a new company. which of the following is likely to be the result of this merger?
a、decreased cost per unit output
b、decreased bargaining power over suppliers and customers
c、increased industry rivalry
d、decreased profitability
e、decreased product differentiation
9、in 1999, two pharmaceutical companies that held an equal market share decided to pool their operations to create a new firm that was known by a different name. this is an example of a(n):
a、merger.
b、acquisition.
c、procurement.
d、take over.
e、dissolution.
10、google bought clever sense, a mobile app company. this is an example of a(n):
a、parallel sourcing policy.
b、strategic outsource.
c、strategic alliance.
d、merger.
e、acquisition.
11、for a company concentrating on final assembly, adding retail and distribution into it's value chain will require:
a、backward integration.
b、forward integration.
c、taper integration.
d、related diversification.
e、unrelated diversification.
12、a company should first choose a corporate-level strategy, and then look at how changes will affect a company's current business model and strategies.
13、managers use corporate-level strategy to identify which industries a company should compete in to maximize long-run profitability.
14、an advantage of horizontal integration is that it can lower a company’s cost structure by creating increasing economies of scale.
15、when a company stays inside one industry, the problems of sustaining a successful business model and strategies over time can be difficult because of changing conditions in the environment.
16、unfortunately, horizontal integration can not be accomplished by acquisitions or mergers.
17、oracle corp., based in reno, nevada, has purchased several other companies to become the world's largest maker of database software. this strategy is known as the strategy of acquisition.
18、horizontal integration allows companies to obtain bargaining power over suppliers or buyers and increase their profitability at the expense of suppliers or buyers.
19、horizontal integration can help lower costs when it allows a company to reduce the duplication of resources.
20、product bundling occurs when a firm offers a range of products that are sold together at a single price.
21、when a bank offers home mortgages and credit cards to its checking account customers, it is using horizontal integration strategy.
22、horizontal integration can lead to low cost advantages but rarely to differentiation advantages.
23、horizontal integration almost always increases rivalry in an industry.
24、a merger occurs when one company uses its capital resources, such as stock, debt, or cash, to purchase another company.
25、transfer pricing refers to when a company is taken advantage of by another company it does business with after it has made an investment in expensive specialized assets to better meet the needs of the other company.
chapter 10 ：corporate-level strategy: related and unrelated diversificationchapter 10 - corporate-level strategy: related and unrelated diversification1、free cash flow is defined as:
a、money in a company's bank account.
b、government funds given to a company for meeting environmental protection agency (epa) regulations.
c、additional funds donated by stockholders.
d、cash in excess of that required to fund investments in the company's industry and to meet any debt commitments.
e、cash borrowed by the company that requires no interest payments.
2、the managers of most companies often consider _____ when they are generating free cash flow.
a、taper integration
b、full integration
c、diversification
d、long-term contracts
e、strategic alliances
3、which diversification strategy is based on the idea that the company creates value by applying the distinctive competencies it developed in one line of business to another business activity?
a、a technology acquisition strategy
b、related diversification
c、a restructuring strategy
d、total diversification
e、a taper diversification strategy
4、when mcdonald’s introduced the mccafe, it began offering a new product that was not available in traditional mcdonald’s stores. the introduction of the mccafe is an example of which of the following?
a、transferring competencies
b、diversification
c、commonality
d、economies of scope
e、bureaucratic costs
5、company leaders that base their diversification strategy on transferring competencies tend to acquire new businesses that are ____ to their existing business activities.
a、unrelated
b、not comparable
c、opposed
d、related
e、identical
6、leveraging competencies involves taking a distinctive competency developed by a business unit in one industry to create:
a、a new business unit in the same industry.
b、a new business unit in a different industry.
c、lower costs in various business units.
d、differentiation in various business units.
e、new customers in the same industry.
7、product bundling refers to:
a、preparation of products for shipment.
b、a complete package of related products.
c、a method of stocking products efficiently.
d、an inventory procedure for ensuring effective counting of products.
e、a package of unrelated products.
8、_____ involves taking a distinctive competency developed by a business unit in one industry and implanting it in a business unit operating in another industry.
a、sharing resources and capabilities
b、leveraging competencies
c、transferring competencies
d、product bundling
e、strategic management capabilities
9、which of the following is not a general organizational competency?
a、entrepreneurial capabilities
b、capabilities in organizational design
c、superior strategic capabilities
d、product bundling
e、commonality
10、miller brewing, which was acquired by philip morris, was related to the parent company's tobacco business because it was possible to create important marketing commonalities: both beer and tobacco are mass market consumer goods in which brand positioning, advertising, and product development skills are crucial to create successful new products. this is an example of which of the following?
a、transferring competencies
b、leveraging competencies
c、general organizational competencies
d、economies of scope
e、organizational design skills
11、diversification is the process of a company entering new industries distinct from its core industry, using a multibusiness model.
12、free cash flow refers to additional funds from a government stimulus program.
13、if a company generates free cash flow, that money technically belongs to shareholders.
14、when a firm does not pay out its free cash flow to its shareholders, the shareholders bear an opportunity cost equal to their next best use of those funds.
15、at burger king, multiple items such as a cheeseburger, french fries, and a drink are combined together to create a complete meal. this is an example of diversification.
16、sara lee corp., a clothing firm, purchased platex apparel inc. this purchase helped to make sara lee corp. one of the largest makers of women’s apparel in the united states. sara lee corp. utilized an acquisition strategy.
17、transferring competencies across industries involves taking a distinctive competency developed in one industry and implanting it in an existing business unit in another industry.
18、firms can create profitable new business units by leveraging their competencies.
19、one way a diversified company can increase its profitability is by acquiring inefficient or poorly managed companies and then restructuring them to improve their performance.
20、if a company's core skills are highly specialized and have few applications outside the core business, then a company should pursue a related diversification strategy.
21、economies of scope arise when one or more of a diversified company's business units are able to realize cost-saving or differentiation advantages because it can more effectively pool, share, and utilize resources or capabilities.
22、an advantage of unrelated diversification is that competencies can be shared and leveraged throughout the value chain activities.
23、an appropriate reason to diversify is to pool the risk from several business ventures to create a more stable income stream.
24、the coordination required to realize value from a diversification strategy based on transferring, sharing, or leveraging competencies is a major source of bureaucratic costs.
25、an advantage of a joint venture is that it allows a company to quickly gain entry into a new industry where barriers are high.
chapter 12 - implementing strategy through organization1、which of the following is not an element of organizational architecture?
a、location
b、culture
c、processes
d、structure
e、people
2、the totality of a firm’s organizational arrangements including its formal organizational structure, control systems, incentive systems, organizational culture, organization processes, and human capital is referred to as:
a、organizational behavior.
b、organizational norm.
c、organizational architecture.
d、organizational ecology.
e、organizational density.
3、the purpose of a(n) _____ is to provide managers with incentives for motivating employees as well as feedback on how the company performs.
a、control system
b、adaptive culture
c、organizational design
d、span of control
e、hierarchy of authority
4、organizational structure can be defined as:
a、the combination of the location of decision-making responsibilities, the formal division of the organization into subunits, and the establishment of integrating mechanisms to coordinate the activities of the subunits.
b、the blueprint that states how managers intend to use organizational resources to most efficiently achieve organizational goals.
c、the specific collection of values, norms, beliefs, and attitudes that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization.
d、the degree to which a company specifies how decisions are to be made so that employees’ behavior becomes predictable.
e、the process of redesigning business processes to achieve dramatic improvements in performance, such as cost, quality, service, and speed.
5、organizational culture is:
a、the norms and value systems that are shared among the employees of an organization.
b、the means through which a company assigns employees to specific tasks and roles and specifies how these tasks and roles are to be linked together to increase efficiency, quality, innovation, and responsiveness to customers.
c、the process of deciding how a company should create, use, and combine organizational structure, control systems, and culture to pursue a business model successfully.
d、the clear and unambiguous chain of command that defines each manager’s relative authority from the ceo down through top, middle, to first-line managers.
e、the principle that a company should design its hierarchy with the fewest levels of authority necessary to use organizational resources effectively.
6、control through organizational culture is so powerful because:
a、it eliminates the need for managers in large companies.
b、it enables employees to follow organizational values, after they've internalized them, without thinking about them.
c、it results in maximum decentralization and the elimination of bureaucracy.
d、it achieves increased performance through the alignment of organizational goals with external societal expectations.
e、it achieves external control through motivated coworkers.
7、control through organizational culture:
a、is less expensive than output control.
b、reduces mutual adjustment.
c、involves employees internalizing the norms and values of the organization.
d、includes setting individual goals.
e、includes obtaining specific feedback to help managers evaluate performance.
8、which form of control would you most likely find in a voluntary or charity organization?
a、bureaucratic control through rules and procedures
b、control through norms and values
c、financial control through accurate financial statements
d、output control, since it is the cheapest
e、incentive systems to motivate employees
9、companies that are innovative and able to deal with environmental change with new strategies and structures probably have:
a、weak cultures.
b、strong functional cultures.
c、adaptive cultures.
d、prescriptive cultures.
e、cost-conscious culture.
10、to a large degree, any organization's tasks are a function of its:
a、market area.
b、labor supply.
c、supervisors.
d、strategies.
e、compensation plan.
11、organization architecture is the interaction of structure, controls & incentives, people, processes, and culture within the organization.
12、organizational structure is at the core of an organizations architecture.
13、the purpose of organizational structure is to provide managers with specific feedback on how well an organization and its members are performing.
14、an important purpose of control systems is to motivate employees to work toward increasing efficiency, quality, innovation, and responsiveness to customers.
15、a division is a way of grouping functions to allow an organization to better produce and dispose of its goods and services.
16、span of control refers to the number of subordinates who report directly to one supervisor.
17、different divisions in a firm with a multidivisional structure are not given authority to adopt their own organizational structures.
18、the reward system affects motivation; however, the type of organizational culture that develops in a company is primarily affected by the founder’s values and not the reward system.
19、control through culture is ineffective because employees do not internalize values.
20、organizational structure contributes to strategy formulation by providing the framework of tasks and roles that reduce transaction difficulties and allows employees to think and behave in ways that enable a company to achieve superior performance.
21、bradley is a new employee in the sales department at a local car dealership. in his first few months on the job, he will be learning the norms and values of the organization. this refers to organizational socialization.
22、in a firm with a multidivisional structure, corporate managers oversee the actions of divisional managers.
23、the organizational hierarchy is flatter in a multidivisional structure than in a product or functional structure.
24、in a related multidivisional structure, the concept of corporate culture is meaningless.
25、in a multidivisional structure, corporate managers can compare the performance of one division to another in terms of its cost structure or the profit it generates.
first round test for strategic management（a1）first round test for strategic management（a1）1、profit growth is best measured
a、by the increase in share price.
b、by the return on investment.
c、by the increase in net sales.
d、over time.
e、by increases in liquidity.
2、which of the following is the organization's principal general manager?
a、chairman of the board of directors
b、division head
c、cfo
d、ceo
e、controller
3、matching an organization's structure and control systems to the requirements of a company's strategy is
a、part of the strategy making process.
b、part of the swot analysis.
c、facilitated through the feedback loop.
d、part of internal analysis.
e、all of these choices.
4、the primary goal of a swot analysis is to
a、benchmark a company's performance.
b、force managers to think creatively rather than analytically.
c、forecast future events.
d、develop short-run goals.
e、create, affirm, or fine-tune a company-specific business model.
5、when considering emergent strategies, it is important for a firm's managers to
a、ensure that the chosen strategies are the result of deliberate plans.
b、ignore strategies that are not the result of a formal planning process.
c、evaluate each one carefully, using only those that show the most promise.
d、substitute emergent strategies for formal plans whenever possible.
e、develop the emergent strategies themselves.
6、which of the following is not a cognitive bias?
a、escalating commitment
b、reasoning by analogy
c、ivory tower thinking
d、representativeness
e、illusion of control
7、cosmetics makers focus on the unique needs of customers of different ages. the cosmetics makers recognize the importance of
a、shifting industry boundaries.
b、the threat of new entrants.
c、sectors.
d、market segments.
e、substitutes.
8、the level of industry demand
a、has little effect on competition in the industry.
b、is one of the determinants of the intensity of rivalry in the industry.
c、increases as the number of customers grows.
d、is influenced by bankruptcy regulations.
e、all of these choices
9、which of the following is not one of porter's five forces, as proposed in his original model?
a、threat of complementors
b、bargaining power of suppliers
c、rivalry among established companies
d、threat of new entrants
e、threat of market changes
10、members of a strategic group
a、compete directly with members of other strategic groups.
b、are affected by porter's five competitive forces to the same degree that members of other strategic groups are affected.
c、follow a business model that is similar to that pursued by other companies in the group.
d、earn the same rate of return.
e、move easily to other groups as desired.
11、in which of the following arenas would walmart's sam's club stores compete against their closest, most intense rivals?
a、the retailing sector
b、the discount retailing industry
c、the club-store discount retailing strategic group
d、sam's club stores face no close, intense rivals.
e、sam's club stores face close, intense rivals in every arena in which they compete.
12、growth industries
a、typically suffer from high mobility barriers.
b、tend to be characterized by weak rivalry.
c、have high rivalry among established companies.
d、increase prices because customers are more aware of the industry's product.
e、provide economies of scale to existing companies.
13、demand reaches total saturation in the ___________ stage of the industry life cycle.
a、embryonic
b、growth
c、shakeout
d、maturity
e、decline
14、which of the following is not a force within the macroenvironment?
a、level of interest rates
b、currency exchange rates
c、inflation
d、deflation
e、rates of social change
15、beverage makers are finding that water sales are increasing due to consumers' preferences for healthy drinks. which part of the macroenvironment does this represent?
a、economic forces
b、demographic forces
c、embryonic forces
d、political forces
e、social forces
16、which of the following is not true regarding a company's distinctive competencies?
a、they represent the unique strengths of the company.
b、they refer to company strengths that competitors cannot easily match or imitate.
c、they form the bedrock of a company's strategy.
d、they can be based in any of the value creation functions of the company.
e、they are shared by many firms in an industry.
17、donna can make a chair for about $100, she charges customers $150 to buy the chair, and customers perceive that the chair is worth $225. donna's profit margin is
a、$50.
b、$75.
c、$100.
d、$150.
e、$225.
18、ford motors developed the explorer sports utility vehicle, the number 1 selling sports utility vehicle in the united states, based on an extensive study of customer preferences. which value chain activity of ford conducted those studies?
a、research and development
b、human resources
c、materials management
d、marketing and sales
e、company infrastructure
19、at the most basic level, a business is simply a device for
a、transforming inputs into outputs.
b、transporting products from one location to another.
c、converting outputs into inputs.
d、transferring title to goods from one party to another.
e、conserving outputs.
20、the concept of quality applies to
a、all products.
b、the products consumers believe to be high-quality products.
c、products with a high per-unit cost.
d、custom-made products only.
e、only those products that have been redesigned.
21、one of the most widely used measures of financial performance is
a、return on invested capital.
b、net profit margin.
c、share value.
d、net sales.
e、productivity.
22、cost of goods sold is determined by examining which of the following?
a、the balance sheet
b、sources and uses of the financial statement
c、the cash budget
d、the income statement
e、the overhead and administrative expense statement
23、which of the following factors does not determine the durability of a company's competitive advantage?
a、barriers to imitation
b、a company's prior strategic commitments
c、capability of competitors
d、general level of dynamism in the industry
e、the rate of product innovation in an industry
24、according to a number of scholars, what role does luck play in determining competitive success and failure?
a、no role at all
b、a very small role
c、it produces sustained excellence.
d、a critical role
e、none of these choices
25、managers should not become complacent about efficiency-based cost advantages because
a、neither learning effects nor economics of scale go on forever.
b、the experience curve is likely to bottom out at some point.
c、cost advantages gained from experience effects can be made obsolete by the development of new technologies.
d、all of these choices.
e、none of these choices
26、customer defection rates are
a、a reflection of customer loyalty.
b、an indication of a company's ability to satisfy its customers.
c、important to consider because of their potential impact on advertising and marketing costs.
d、an important consideration because of their effect on sales volumes.
e、all of the above.
27、just-in-time inventory systems
a、are used only by manufacturing firms.
b、are implemented primarily by the manufacturing function.
c、have components arrive at a manufacturing plant just in time to enter the production process.
d、are valuable when there is a labor dispute with a key supplier.
e、always keep extra inventory on hand for emergencies
28、pay for performance tends to
a、increase per-unit costs.
b、decrease employee output.
c、increase employee output.
d、have little effect on employee output.
e、be used only for individual workers, not for teams.
29、which of the following is not one of the principles commonly found in companies that have successfully embraced the tqm philosophy?
a、building an organizational commitment to quality
b、finding ways to measure quality
c、a strong customer focus
d、close supplier relations
e、creating a separate quality department within the firm
30、limiting the number of suppliers from many to a manageable number
a、is the responsibility of top management.
b、may help a firm to achieve superior quality.
c、may help a firm to achieve superior innovation.
d、is the responsibility of research and development.
e、is the responsibility of manufacturing.
31、the failure rate of innovative products is
a、high.
b、low.
c、consistent with failure rates in other areas of a company's operations.
d、moderate.
e、too difficult to assess.
32、which of the following is one of the important skills required for effective project management?
a、ability to generate as many good ideas as possible
b、ability to select among competing projects at an early stage of development so that the most promising receive funding and potential costly failures are killed off
c、ability to minimize time to market
d、all of these choices
e、none of these choices
33、which of the following trends has led to the fragmentation of many consumer markets?
a、self-managing teams
b、project management
c、tqm
d、customization
e、increased response time
34、roza munoz oversees the overall operations of maxwell coffee house which is one of the divisions of kraft foods company. roza is also responsible for the overall performance of the business division. which of the following is not likely to be one of roza's responsibilities?
a、turning corporate-level strategy into action
b、defining kraft food’s mission statement
c、deciding how to compete in the coffee industry
d、supervising functional-level managers
e、developing a business-level strategy
35、which of the following statements is true about government regulations in the context of entry barriers of an industry?
a、government deregulation in an industry results in significant reduction in competition.
b、government regulation is not a major entry barrier for any industries.
c、falling entry barriers due to government deregulation results in higher competition and lower industry profit rates.
d、the threat of new entrants reduces when the government deregulates an industry.
e、companies that enjoy brand loyalty and have significant scale economies are the ones who face major threat of competition due to government deregulation.
36、ray, a toymaker, knits a stuffed unicorn for belle. which function of the value chain is illustrated in this scenario?
a、marketing
b、distribution
c、research
d、production
e、sales
37、which of the following is not one of the principles commonly found in companies that have successfully embraced the tqm philosophy?
a、building an organizational commitment to quality
b、finding ways to measure quality
c、giving more time for supervisors to work with employees
d、training new employees
e、defining work standards only in terms of numbers or quotas
38、which of the following is not a benefit of tight cross-functional integration among research and development (r&d), production, and marketing?
a、new products are designed for ease of manufacture.
b、development costs are kept in check.
c、product development projects are driven by company innovations.
d、time to market is minimized.
e、customer needs are considered in the product development process.
39、in the context of strategic management of a company, _____ have profit-and-loss responsibility for a product, a business, or the company as a whole.
a、line managers
b、functional managers
c、general managers
d、government regulators
e、marketing managers
40、a company, at its inception, states that its goal is “to provide the best customer service possible.” which of the following best describes this objective?
a、the company’s emergent strategy
b、the company’s corporate structure
c、the company’s hr strategy
d、the company’s mission statement
e、the company’s damage control plan
41、which of the following is not a barrier to entry?
a、economies of scale
b、brand loyalty
c、absolute cost advantages
d、high customer bargaining power
e、high customer switching costs
42、which of the following industry structures consists of a large number of small or medium-sized companies, none of which is in a position to determine industry price?
a、fragmented industry
b、consolidated industry
c、oligopoly
d、monopoly
e、sector
43、which of the following is not a determinant of the extent of rivalry among established companies?
a、industry competitive structure
b、demand conditions
c、the cost structure of firms in an industry
d、exit barriers
e、the power of buyers
44、julian was asked to examine the demographic forces facing his employer, a clothing manufacturer. which of the following factors is julian most likely to examine?
a、government regulations
b、inflation
c、manufacturing technology
d、age of the population
e、society's growing interest in exercise
45、which of the following is an important attribute for a product from a quality-as-reliability perspective?
a、styling
b、aesthetic appeal
c、wait time at the point of sale
d、features
e、performance
46、which of the following best describes product innovation?
a、transforming a quantity of inputs into a given output
b、identifying and satisfying a customer's needs
c、creating products that have superior attributes than existing products.
d、developing a new process that focuses on quantity rather than quality.
e、measuring the quantity of outputs produced per employee
47、ford motors developed the explorer sports utility vehicle in 1990, and it is still in the top ten best-selling sports utility vehicles in the united states, based on an extensive study of customer preferences. which value chain activity of ford conducted those studies?
a、research and development
b、human resources
c、materials management
d、marketing and sales
e、marketing and sales
48、learning effects:
a、result in unit manufacturing costs increasing by a certain amount each time output is increased.
b、suggest that production costs increase because of increasing labor productivity.
c、are more significant when simple steps in an assembly process are performed over and over again.
d、are more significant when a technologically complex task is repeated.
e、lead to diseconomies of scale.
49、the mountain ski lodge spent $100,000 marketing and advertising its new ski trails and on-site spa. the money used for marketing and advertising can be referred to as:
a、variable costs.
b、fixed costs.
c、ratio costs.
d、diseconomies of scale.
e、economies of scale.
50、____ refers to unit cost increases associated with a large scale of output.
a、economies of scale
b、learning effects
c、diseconomies of scale
d、flexible manufacturing
e、mass customization
51、walmart's business model focused on urban and suburban locations.
52、a strategy can be defined as a set of related actions that managers take to increase their company's performance.
53、the great virtue of scenario planning is that managers must think outside the box to anticipate what they might do in different situations.
54、over the last few decades, the united states steel industry has become less concentrated.
55、one of the key factors in the success of walmart is the buying power gained by dealing directly with manufacturers.
56、successful innovation can transform the nature of industry competition.
57、technological change such as the rise of the internet can represent either an opportunity or a threat.
58、distinctive competencies are firm-specific strengths that allow a company to differentiate its products and/or achieve substantially lower costs than its rivals.
59、the price a company charges for a good or service is typically more than the utility placed on that good or service by the customer.
60、a rapid response time is one of the key factors that enables the fashion house zara to quickly address changes in the fashion industry.
61、imitating a company's capabilities tends to be more difficult than imitating its tangible and intangible resources.
62、distinctive competencies shape the functional-level strategies that a company can pursue.
63、mass customization describes the ability of companies to use flexible manufacturing technology to reconcile the two goals of low cost and differentiation through product customization.
64、quantum innovation refers to an extension of existing technology.
65、strong brand loyalty leads to more sales and the ability to charge higher prices.
66、one of the factors that distinguish organizations in the nonprofit sector from profit-making businesses is the lack of a need for strategic management.
67、general managers bear responsibility for the overall performance of the company or for one of its major self-contained subunits or divisions.
68、opportunities arise when a company can take advantage of conditions in its environment to formulate and implement strategies that allow it to become more profitable.
69、the bottled water industry created new competitors for coca-cola, but it did not change the basic industry boundaries.
70、the price a company charges for a good or service is typically more than the utility placed on that good or service by the customer.
71、the vrio model is designed to help companies assess the quality of their resources and identify sources of competitive advantage.
72、there is a negative relationship between the length of time that a customer stays with a company and profit per customer.
73、product attributes that collectively define product excellence include the form, features, performance, durability, and styling of the product.
74、production and materials-management functions need not be changed in response to unanticipated customer demands as they do not affect response time.
75、the ability of established competitors to imitate the competitive advantage of a rival is limited by factors such as existing strategic commitments and low absorptive capacity.
76、the vrio model is designed to help companies assess the quality of their resources and identify sources of competitive advantage.
77、nene works in a factory where she picks crab meat from crabs. she is paid per day based upon the number of pounds of crab meat that she picks. nene’s daily number of pounds of crab meat can be referred to as her productivity.
78、distinctive competencies shape the functional-level strategies that a company can pursue.
79、mass customization describes the ability of companies to use flexible manufacturing technology to reconcile the two goals of low cost and differentiation through product customization.
80、six sigma encompasses the activities necessary to get inputs and components to a production facility, through the production process, and out through a distribution system to the end user.
second round test for strategic managementsecond round test for strategic management1、focus strategy can be defined as:
a、the strategy of merging with an established company in order to gain monopoly over the market.
b、the strategy a company uses when it decides to allocate the company resources equally among all the marketing segments.
c、the strategy a company uses when it decides to serve a limited number of segments, or just one segment of the market.
d、the strategy a company uses when it decides to ignore the different needs of different market segments, and produce one standardized product for all the customers.
e、the strategy of closing down one or more business units in order to minimize the losses.
2、which of the following generic competitive strategies is a producer of commodity steel most likely to pursue?
a、exclusive dealing
b、broad differentiation
c、focus differentiation
d、broad low-cost
e、horizontal integration
3、a differentiated product is a product that:
a、has a greater resale value than rival products.
b、provides greater reliability than rival products.
c、is offered free of cost on purchase of a company's standard product.
d、always costs more than rival products.
e、always costs less than rival products.
4、cool looks produces a variety of clothing for various customer groups. which of the following strategies is the firm most likely pursuing?
a、cost leadership
b、differentiation
c、product substitution
d、focus
e、share building
5、when a company produces a wide range of products for various customer groups, it is following a _____ strategy.
a、cost leadership
b、differentiation
c、customer retention
d、market concentration
e、share building
6、compared to a differentiator, the company that follows a low-cost strategy:
a、distinguishes its products from those of rivals by offering something that they find hard to match.
b、absorbs cost increases by powerful suppliers while keeping to their lower pricing.
c、allows the company to charge a premium price for its good or service.
d、uses perceived superior value to generate growth in demand among customers.
e、creates entry barriers for rivals with greater brand loyalty to the specific products offered.
7、the real estate industry is comprised of different firms in several locations. some are independent and popular locally, while others are affiliated to national chains. the real estate industry is most likely to be a(n):
a、fragmented industry.
b、oligopolies industry.
c、pure competition industry.
d、consolidated industry.
e、monopoly.
8、which of the following is not a characteristic of a fragmented industry?
a、low barriers to entry
b、diseconomies of scale
c、brand loyalty in the industry that may primarily be local
d、very specialized customer needs
e、large mass-production operation
9、which of the following statements is true about fragmented industries?
a、they are usually characterized by large mass-production operations.
b、they essentially enjoy a national brand loyalty.
c、they require companies to use focus strategies to meet specialized customer needs.
d、they do not attract new entrants as they have extremely high entry barriers due to economies of scale.
e、they are usually dominated by one or two large companies that enjoy the power to influence industry prices.
10、a company uses _____ when it focuses on pockets of demand that are declining more slowly than the industry as a whole to maintain profitability.
a、acquisition strategy
b、chaining
c、divestment strategy
d、niche strategy
e、franchising
11、one strategy used to consolidate fragmented industries is:
a、vertical mergers.
b、chaining.
c、product proliferation.
d、price signaling.
e、nonprice competition.
12、in a bid to expand its business and gain cost advantages, omega inc. has established several merchandising outlets in different locations. all the outlets share a good network and are interconnected by information technology. the entire network of outlets operates in the industry as one large company. which of the following strategies has omega inc. most likely used ?
a、chaining
b、franchising
c、horizontal merger
d、niche strategy
e、divestment strategy
13、hydralicious, a juice bar, has been looking to expand its business. the company has given a few entrepreneurs in different locations the license to operate under its name.the entrepreneurs have permission to use the company's reputation and the business model to run operations. the entrepreneurs will be charged a fee, but they will also get a percentage of the profits. which of the following strategies is hydralicious most likely to be using ?
a、chaining
b、horizontal merger
c、vertical merger
d、franchising
e、centralization
14、most embryonic industries arise from:
a、a technological breakthrough.
b、product proliferation.
c、lack of high entry barriers.
d、chaining.
e、franchising.
15、customers who have a practical interest in using a new technology in the future and who are willing to experiment and envision new uses for the technology are called:
a、early adopters.
b、the early majority.
c、innovators.
d、laggards.
e、the late majority.
16、which of the following is not an attribute of a national or country-specific environment that has an impact on global competitiveness of companies located in that nation?
a、factor endowments
b、local demand conditions
c、related and supporting industries
d、strategy, structure, and rivalry of firms within the nation
e、advertising expenses
17、which of the following is not a factor of production?
a、land
b、labor
c、raw materials
d、competitive forces
e、managerial sophistication
18、black and decker, capitol one, gillette, and unilever are all companies that conduct business in two or more national markets. these companies are known as:
a、bimarket companies.
b、national companies.
c、domestic companies.
d、multinational companies.
e、localized companies.
19、which of the following statements is true in the context of attributes of national competitive advantage?
a、factor endowments do not encompass aspects such as managerial sophistication.
b、companies are typically least sensitive to the needs of their closest customers.
c、the benefits of investments in advanced factors of production by related and supporting industries are confined to those industries.
d、domestic rivalry creates pressures to increase costs and avoid investing in upgrading advanced factors.
e、the nature of home demand shapes the attributes of domestically made products .
20、swedish strength in fabricated steel products (such as ball bearings and cutting tools) has drawn on strengths in sweden’s specialty steel industry. this is an example of which of the following attributes that impact national competitive advantage?
a、local demand conditions
b、competitiveness of related and supporting industries
c、intensity of rivalry in an industry
d、factor endowments
e、differences in distribution channels
21、the globalization of production has caused firms to:
a、lower their market share.
b、lower their cost structure.
c、centralize their production process.
d、curb international competition.
e、limit the number of market segments.
22、strong pressures for convergence due to a shared history and culture, or the establishment of a trading block where there are deliberate attempts to harmonize trade policies, infrastructure, and regulations have contributed to the rise in what trend?
a、regionalism
b、globalization
c、monopolies
d、nationalism
e、traditional practices
23、when a company grows its sales volume through international expansion, it can realize cost savings from economies of scale through all of the following except:
a、spreading fixed costs over its global sales volume.
b、utilizing its production facilities more intensely.
c、increased bargaining power with its suppliers.
d、learning effects associated with higher volume.
e、adopting high cost structures.
24、which of the following factors increases pressures for cost reductions?
a、meaningful differentiation between products
b、reduced international competition
c、competitors that are based in high-cost locations
d、high switching costs
e、persistent excess capacity
25、which of the following factors increases pressures for local responsiveness?
a、powerful buyers
b、uniformity in distribution channels
c、host government demands
d、similarities in customer tastes and preferences
e、competitors that are based in high-cost locations
26、in the wireless telecommunications industry, different technical standards are found in different parts of the world. a technical standard known as gsm is common in europe, and an alternative standard, cdma, is more common in the united states and parts of asia. equipment designed for gsm will not work on a cdma network and vice versa. which of the following pressures for local responsiveness does this represent?
a、global environmental demands
b、host government demands
c、differences in distribution channels
d、differences in customer tastes and preferences
e、differences in infrastructure
27、nutrimax, a sports foods manufacturer, has recently expanded its operations to different countries. the company has realized that customers in different countries have different tastes and preferences. so, the company customizes its products based on the country where it's selling. in this scenario, nutrimax is most likely to be using _____ strategy.
a、global standardization
b、localization
c、achilles heel
d、centralization
e、transnational
28、which of the following statements is true about localization strategy?
a、it focuses on marketing a standardized product worldwide to achieve cost reductions.
b、it makes most sense when cost pressures are extremely intense.
c、it is most appropriate when there are similarities across nations with regard to consumer tastes and preferences.
d、it involves some duplication of functions and smaller production runs.
e、it usually relieves companies of the task of closely monitoring their costs.
29、relish is a large fast food chain that operates in many countries. as there are several competitors in the fast food sector, the company has been facing intense pressures for achieving low cost structures. the company also faces the task of customizing its product line as there are significant differences in tastes and preferences among customers in different geographic locations. in order to achieve both low costs and product differentiation, the company should aim to pursue a _____ strategy.
a、global standardization
b、transnational
c、localization
d、downsizing
e、divestment
30、which of the following entry modes allows a company to engage in global strategic coordination?
a、exporting
b、licensing
c、joint ventures
d、wholly owned subsidiaries
e、franchising
31、music cds and newspaper sales have been falling as users turn to the internet for their music and news. which of the following is not a strategy for companies in these declining industries?
a、leadership
b、chaining
c、niche
d、divestment
e、harvest
32、competitive intensity in a declining industry is greatest when:
a、the industry is declining slowly instead of rapidly.
b、the product is easy to differentiate.
c、exit barriers are high.
d、entry barriers are high.
e、technology is stable.
33、in deciding on a strategy, a company in a declining industry must do all of the following except
a、lower prices.
b、manage industry capacity.
c、evaluate its strengths relative to the remaining pockets of demand.
d、evaluate the severity of decline.
e、monitor its cash flow.
34、a_____ strategy aims to help a company grow in a declining industry by picking up the market share of companies that are leaving the industry.
a、divestment
b、harvest
c、price signaling
d、leadership
e、capacity control
35、an app development firm is working on a new product to identify and consolidate a smartphone users' favorite and most used apps into one place on the phone. if the new product will be sold to existing customers, the firm is pursuing a strategy of:
a、product development.
b、market penetration.
c、product proliferation.
d、market signaling.
e、market development
36、which of the following is not a main approach to market segmentation?
a、marketing a product targeted toward average or typical customers
b、marketing a product to a group of people who are more likely to purchase it
c、making customized products to suit the unique requirements of customers
d、making products to meet the specific needs of a narrow group of customers
e、making products to meet the specific needs of a narrow group of customers
37、the main difference between companies following a broad low-cost strategy and those following a focus low-cost strategy is in the:
a、standardized market price.
b、industry life cycle stage.
c、degree of market segmentation.
d、age of the market.
e、market trajectory.
38、a company that follows the _____ strategy customizes its offering to a particular niche in order to outsell its rivals.
a、focused differentiation
b、broad low-cost
c、market standardization
d、rapid growth
e、stuck in the middle
39、production of a large product variety without a large cost penalty is known as:
a、market concentration.
b、market segmentation.
c、focused differentiation.
d、mass production.
e、mass customization.
40、at the luxury hotel in miami, florida, three hotel employees serve the needs of each guest. in every room, a guest can summon a chef, a maid, or a valet by pressing a button at his/her bedside. which generic business-level strategy is the luxury hotel utilizing?
a、cost leadership
b、differentiation
c、vertical integration
d、razor and blade
e、brand loyalty
41、a firm's business model should contain three components: what is to be satisfied, who is to be satisfied, and how they will be satisfied.
42、the way a product is differentiated from other products of its type and the price of the product determine which product a customer chooses to satisfy his or her needs.
43、companies with a differentiation advantage tend to charge a lower price for their products.
44、in commodity markets, competitive advantage goes to the company that has the lowest costs.
45、a company has a competitive advantage if it can increase costs relative to rivals.
46、differentiation can help a company to grow overall demand and capture market share from its rivals.
47、differentiation leads to high brand loyalty, which in turn significantly increases the threat of new firms entering the industry.
48、market segmentation refers to the process of subdividing a market into clearly identifiable groups of customers with similar needs, desires, and demand characteristics.
49、a generic business-level strategy is a strategy that gives a company a specific form of competitive position and advantage over its rivals that results in above-average profitability.
50、a product's appeal to customers' desires cannot be considered a source of differentiation.
51、an efficiency frontier shows all of the different positions that a company can adopt with regard to differentiation and cost.
52、mike's eatery, a fast food chain, neither customizes its product offerings nor sells new products based on market segments. mike's eatery is pursuing standardization strategy.
53、a fragmented industry is composed of a large number of small and medium-sized companies.
54、fragmented industries typically have high barriers to entry.
55、by their choices of competitive actions and decisions about product attributes, managers can speed up or slow down the rate of progress of an industry through the stages of the industry life cycle.
56、relish inc. created the first national chain of fast-food restaurants in a previously fragmented industry. this is called divestment.
57、the franchisor typically owns and funds each of its franchisees.
58、a harvest strategy requires the company to halt all new investments in capital equipment, advertising, research and development, and other activities that require cash flow.
59、a divestment strategy's success is often dependent upon good timing.
60、a leadership strategy aims at growing in a declining industry by picking up the market share of companies that are leaving the industry.
61、market development strategy involves finding new market segments for a company's products.
62、a limit price strategy involves charging a price that is lower than that required to maximize profits in the short run, but is above the cost structure of potential entrants.
63、one advantage of a joint venture is that a company may benefit from a local partner's knowledge of the many dimensions of a host country.
64、if a company's competitive advantage derives from its control of proprietary technological know-how, it should either license its technology to others or pursue a joint venture.
65、companies should form strategic alliances with firms that have a reputation for being opportunistic.
66、strategic alliances can be designed to make it difficult (if not impossible) to transfer technology that is not meant to be transferred.
67、when a company licenses its technology it can quickly lose control over it.
68、most manufacturing companies begin their global expansion by exporting.
69、company leaders that pursue a global standardization strategy are trying to develop a business model that simultaneously achieves low costs and differentiates the product offering across geographic markets.
70、a localization strategy is most appropriate when there are substantial differences across nations with regard to consumer tastes and preferences and when cost pressures are not too intense.
third round test for strategic managementthird round test for strategic management1、in 1999, two pharmaceutical companies that held an equal market share decided to pool their operations to create a new firm that was known by a different name. this is an example of a(n):
a、merger.
b、acquisition.
c、procurement.
d、take over.
e、dissolution.
2、google bought clever sense, a mobile app company. this is an example of a(n):
a、parallel sourcing policy.
b、strategic outsource.
c、strategic alliance.
d、merger.
e、acquisition.
3、rachel, a new mom, is shopping for baby products. she notices that one of the manufacturers, lucy's, is offering a wide range of products such as baby shampoo, baby lotion, and baby wipes, together, at a better price as one combined product. which of the following concepts is the company utilizing to meet the customer's needs?
a、product bundling
b、cross-selling
c、hostage taking
d、strategic outsourcing
e、parallel sourcing
4、for a company concentrating on final assembly, adding retail and distribution into it's value chain will require:
a、backward integration.
b、forward integration.
c、taper integration.
d、related diversification.
e、unrelated diversification.
5、which of the following is not a benefit of vertical integration?
a、facilitated investments in specialized assets
b、enhanced product quality
c、improved scheduling
d、lowered cost structure
e、strengthened differentiation advantage
6、vertical integration can be disadvantageous when:
a、competitors are vertically integrated.
b、demand is stable.
c、industry technology is changing rapidly.
d、the company is operating in the home country.
e、costs of company decreases.
7、the price that one division of a company charges another division for its products, which are the inputs the other division requires to manufacture its own products is known as:
a、vertical disintegration.
b、related pricing.
c、transfer pricing.
d、related diversification.
e、tapered pricing.
8、a company pursuing a strategy of vertical integration may expand its operations:
a、backward into an industry that produces inputs for the company's products.
b、by making specialized investments jointly with its competitor.
c、laterally into an industry that competes with the company's products.
d、by merging with industry competitors.
e、by using its capital resources to purchase another company within the industry.
9、under which of the following circumstances is vertical integration considered hazardous?
a、when the demand for the product fluctuates frequently
b、when vertical integration involves moving downstream into retailing
c、when the value added by successive stages of production is declining
d、when the industries involved are undergoing rapid expansion
e、when the company's competitors are also following a strategy of vertical integration
10、vertical disintegration occurs when:
a、a company decides to exit industries to its core industry.
b、a company takes advantage of another company it does business with after the other company has made an substantial investment in assets to meet the needs of the company.
c、a company decides to acquire its suppliers and distributors.
d、a company uses its capital resources to purchase its competitor.
e、a company decides to sell its business model to another company.
11、vertical integration is based on a company entering only those industries that:
a、are involved in the distribution of products.
b、are considered as potential competitors.
c、are involved in sourcing raw materials.
d、are not in any way related to the company's current business operation.
e、add value to its core products.
12、ownership of retail outlets may be important for a manufacturer if:
a、the products produced by the manufacturer are not complex.
b、after-sales service is required for complex products.
c、products are expended in consumption.
d、products are intended for one-time use.
e、products are inexpensive.
13、which of the following problems is associated with the strategy of vertical integration?
a、decrease in cost structure
b、increase in industry competition
c、vulnerability to unpredictable demand
d、assured conflict with the antitrust authorities
e、lack of bureaucratic costs
14、when technology in an industry is changing rapidly, a company pursuing a strategy of vertical integration may find itself:
a、locked into an old, inefficient technology.
b、able to sell its products at continually lower prices.
c、increasing returns on its assets.
d、establishing a monopoly in the industry.
e、lowering its cost structure.
15、a strategy of vertical integration may be a risky strategy for a company to pursue when demand is:
a、predictable.
b、stable.
c、unpredictable.
d、steadily increasing.
e、rapidly increasing.
16、an automobile company enters into a long-term contract with two suppliers for the same automobile tool. this is to ensure the company is protected in the event one of the suppliers adopts an uncooperative attitude. which of the following concepts is illustrated in this scenario?
a、outsourcing
b、vertical integration
c、horizontal integration
d、parallel sourcing
e、full integration
17、credible commitments refer to:
a、believable promises that support the development of a long-term relationship between companies.
b、the merging of two companies that have an equal market share.
c、to obtaining of goods, services or works from an external source.
d、the acquisition of one company by another company.
e、the outsourcing of after-sale services to a different company.
18、long-term agreements between two or more companies to jointly develop new products or processes that benefit all of the companies involved in the agreement are known as:
a、horizontal integration.
b、outsourcing.
c、strategic alliance.
d、joint venture.
e、vertical integration.
19、miller brewing, which was acquired by philip morris, was related to the parent company's tobacco business because it was possible to create important marketing commonalities: both beer and tobacco are mass market consumer goods in which brand positioning, advertising, and product development skills are crucial to create successful new products. this is an example of which of the following?
a、transferring competencies
b、leveraging competencies
c、general organizational competencies
d、economies of scope
e、organizational design skills
20、which of the following statements is not generally true of a diversification strategy based on the realization of economies of scope?
a、the strategy requires the head office to evaluate each business unit as a stand-alone operation.
b、the strategy allows a company to realize cost economies among business units.
c、the strategy may allow a company to use shared resources more intensively, thereby realizing economies of scale.
d、the strategy requires managers to be aware of the costs of coordination.
e、the strategy requires close coordination among different business units.
21、which of the following may be true for a company pursuing a strategy of unrelated diversification rather than a strategy of related diversification?
a、the company has to achieve coordination between business units.
b、the company has narrow organizational competencies.
c、the company has superior strategic management and organizational design.
d、the company has no bureaucratic costs that arise from the number of businesses in its portfolio.
e、the company has no difficulty in keeping its corporate managers informed about the complexitities of each business.
22、a company should pursue related diversification instead of unrelated diversification when the company's:
a、core skills are applicable to a wide variety of industrial and commercial situations.
b、core skills are highly specialized and have few applications outside the core business.
c、top managers are skilled at acquiring and turning around poorly run enterprises.
d、main objective is to maximize its growth.
e、free cash flow is high enough that it has funds available for investment.
23、a company should pursue unrelated diversification instead of related diversification when:
a、its core skills are highly specialized and have few applications outside its core business.
b、the company's top managers are skilled at acquiring and turning around poorly run enterprises.
c、its core technological skills are applicable to a wide variety of industrial and commercial situations.
d、it wants to maximize growth.
e、the bureaucratic costs of implementation do not exceed the value that can be created by realizing economies of scope.
24、when one or more components of a company's value chain are applicable to a wide variety of industrial and commercial situations, which of the following strategies should a company pursue?
a、unrelated diversification
b、related diversification
c、a focus strategy
d、taper integration
e、backward integration
25、a strategy based on diversification may fail to add value because companies:
a、seek to achieve differentiation instead of low cost.
b、diversify into areas in which they have some knowledge and miss out on profitable opportunities in other areas.
c、make acquisitions rather than develop new technologies on their own.
d、incur bureaucratic costs that exceed the value created by the strategy.
e、seek to achieve a low-cost position instead of differentiation.
26、diversification may dissipate value if it is wrongly based on:
a、realizing economies of scope.
b、rescuing core business.
c、transferring competencies.
d、acquisitions and restructuring.
e、leveraging existing competencies.
27、in which of the following cases are bureaucratic costs likely to be lowest?
a、a vertically integrated company with five divisions that pursues full integration
b、a company with five divisions that pursues related diversification based on economies of scope
c、a company with five divisions that pursues related diversification based on transferring competencies
d、a company with five divisions that pursues unrelated diversification based on acquisitions and restructuring
e、a company with twenty divisions that pursues taper integration
28、the greater the number of business units in a company's portfolio, the ____ it is for corporate managers to understand the complexities of each business.
a、easier
b、more difficult
c、less important
d、less expensive
e、more meaningless
29、which of the following reasons can make a diversification strategy an unwise course of action for a company to pursue?
a、steady industry conditions
b、varying firm-specific conditions
c、diversification for pooling risks
d、decreasing bureaucratic costs
e、greater differentiation of products
30、the three main types of diversification strategies are:
a、acquisitions, joint ventures, and divestments.
b、acquisitions, mergers, and buy outs.
c、acquisitions, internal new ventures, and joint ventures.
d、related acquisitions, unrelated acquisitions, and mergers.
e、joint ventures, strategic alliances, and long-term contracts.
31、new ventures are a more attractive strategy than acquisitions when:
a、entry barriers are high.
b、a company's business model is based on using its technology to innovate new kinds of products for related markets.
c、it needs to move fast to establish a presence in an industry, commonly an embryonic or growth industry.
d、the company must make the huge investment necessary to develop the set of value-chain activities required to make and sell products in the new industry.
32、new ventures:
a、should be killed if they don't make a profit within three years.
b、are often preferred by technology-based companies.
c、are more attractive compared to acquisitions when entry barriers are high.
d、are less risky than acquisitions.
e、are best when the company is entering the industry on a small scale.
33、which of the following statements concerning research and development is correct?
a、exploratory research is more important than development research.
b、development research is more important than exploratory research.
c、exploratory research is directed toward commercialization of a new technology.
d、development research advances basic science.
e、exploratory research and development research are needed for internal new venturing.
34、in which of the following industry environments are acquisitions most likely to be favored over new ventures?
a、an embryonic industry
b、an industry in its later stages of growth
c、an industry passing through the shakeout stage
d、a mature industry
e、a declining industry
35、to be commercially successful, new products must be developed with ____ in mind.
a、manufacturing requirements
b、engineering technology
c、customer requirements
d、sales techniques
e、technical requirements
36、what is the process of transferring resources to and creating a new business unit in a new industry called?
a、external new venturing
b、exportation of resources
c、intrapreneuring
d、risk avoidanc
e、internal new venturing
37、organizational culture is:
a、the norms and value systems that are shared among the employees of an organization.
b、the means through which a company assigns employees to specific tasks and roles and specifies how these tasks and roles are to be linked together to increase efficiency, quality, innovation, and responsiveness to customers.
c、the process of deciding how a company should create, use, and combine organizational structure, control systems, and culture to pursue a business model successfully.
d、the clear and unambiguous chain of command that defines each manager’s relative authority from the ceo down through top, middle, to first-line managers.
e、the principle that a company should design its hierarchy with the fewest levels of authority necessary to use organizational resources effectively.
38、control through organizational culture is so powerful because:
a、it eliminates the need for managers in large companies.
b、it enables employees to follow organizational values, after they've internalized them, without thinking about them.
c、it results in maximum decentralization and the elimination of bureaucracy.
d、it achieves increased performance through the alignment of organizational goals with external societal expectations.
e、it achieves external control through motivated coworkers.
39、control through organizational culture:
a、is less expensive than output control.
b、reduces mutual adjustment.
c、involves employees internalizing the norms and values of the organization.
d、includes setting individual goals.
e、includes obtaining specific feedback to help managers evaluate performance.
40、which form of control would you most likely find in a voluntary or charity organization?
a、bureaucratic control through rules and procedures
b、control through norms and values
c、financial control through accurate financial statements
d、output control, since it is the cheapest
e、incentive systems to motivate employees
41、companies that are innovative and able to deal with environmental change with new strategies and structures probably have:
a、weak cultures.
b、strong functional cultures.
c、adaptive cultures.
d、prescriptive cultures.
e、cost-conscious culture.
42、to a large degree, any organization's tasks are a function of its:
a、market area.
b、labor supply.
c、supervisors.
d、strategies.
e、compensation plan.
43、the degree to which a company specifies how decisions are to be made so that employees' behavior becomes predictable is referred to as:
a、uniformity of output.
b、conformity.
c、organizational processes.
d、maximization of effort.
e、behavioral control.
44、in a successful company, the purpose of a control system is to:
a、provide managers with a set of incentives to motivate employees to work toward company goals.
b、allow the managers to use punishments as a tool to ensure that the employees meet the company targets.
c、collect values, norms, beliefs, and attitudes and share them with people and groups in an organization.
d、decide how a company should create, use, and combine organizational structure and culture.
e、assign employees to specific value creation tasks and roles and specify how these tasks and roles should work together.
45、in any organization, for-profit or not-for-profit, span of control refers to the:
a、number of managers at the highest levels in the organization.
b、ceo and his or her management team.
c、number of subordinates who report directly to one manager.
d、number of supervisors in a specific segment of a manufacturing activity.
e、number of members elected or appointed to be the board of directors.
46、the specific collection of values, norms, beliefs, and attitudes shared by people and groups in a company is commonly referred to as:
a、organizational fit.
b、organizational culture.
c、organizational development.
d、organizational positioning.
e、organizational design.
47、the term used to describe how people learn an organization's culture and way of behaving in the organization is:
a、organizational structure.
b、organizational development.
c、organizational design.
d、organizational behavior.
e、organizational socialization.
48、organizations strive to control employees' behavior by linking ____ systems to their control systems.
a、disciplinary
b、disincentive
c、reporting
d、administrative
e、incentive
49、at littlehippo, an online retail company, the work environment is playful. employees often get their pictures taken wearing silly wigs and masks. this atmosphere is part of the company’s:
a、organizational density.
b、organizational structure.
c、organizational culture.
d、strategic control systems.
e、competitive environment.
50、natalie and shay are both employees at righttool, inc., the marketing manager, often meets with shay, the production manager, in order to solve specific mutual problems. this is an example of:
a、organizational culture.
b、liaison roles.
c、direct contact.
d、diverging mechanisms.
e、strategic control.
51、at fastfries, a fast food restaurant, rules are published in all employee areas, explaining expectations regarding arrival time, lunch breaks, when to take shorter breaks, and when to socialize. this is an example of:
a、output control.
b、personal control.
c、bureaucratic control.
d、conversion activities.
e、strategic competencies.
52、to reduce costs, companies pursuing a cost leadership strategy prefer to use _____ to closely monitor and evaluate functional performance.
a、output controls
b、personal controls
c、behavioral controls
d、cultural controls
e、input controls
53、a drawback of the functional structure is:
a、that each worker must report to more than one superior.
b、the difficulty in communicating and coordinating across functions.
c、too much decentralization of decision-making authority.
d、its lack of flexibility in decision-making.
e、the need to downsize before implementing this structure.
54、if a firm’s leaders are using a functional structure but feel it is becoming too complex as the company grows in size, the leaders can turn to:
a、a simple structure.
b、downsizing.
c、reengineering.
d、restructuring.
e、a multidivisional structure.
55、horizontal integration can help lower costs when it allows a company to reduce the duplication of resources.
56、product bundling occurs when a firm offers a range of products that are sold together at a single price.
57、when a bank offers home mortgages and credit cards to its checking account customers, it is using horizontal integration strategy.
58、horizontal integration can lead to low cost advantages but rarely to differentiation advantages.
59、horizontal integration almost always increases rivalry in an industry.
60、a merger occurs when one company uses its capital resources, such as stock, debt, or cash, to purchase another company.
61、transfer pricing refers to when a company is taken advantage of by another company it does business with after it has made an investment in expensive specialized assets to better meet the needs of the other company.
62、vertical integration is undertaken to support the competitive position of a company's core business.
63、vertical integration can strengthen a company's differentiation business-level strategy and competitive advantage.
64、vertical integration can raise costs if, over time, a company's leaders continue to purchase inputs from company-owned suppliers even when independent suppliers can supply the same inputs at lower cost.
65、firms can create profitable new business units by leveraging their competencies.
66、a company's top managers do not need to have entrepreneurial capabilities for diversification to increase profitability.
67、one way a diversified company can increase its profitability is by acquiring inefficient or poorly managed companies and then restructuring them to improve their performance.
68、if a company's core skills are highly specialized and have few applications outside the core business, then a company should pursue a related diversification strategy.
69、a company can pursue relative diversification to enhance the competitive position of its core business.
70、economies of scope arise when one or more of a diversified company's business units are able to realize cost-saving or differentiation advantages because it can more effectively pool, share, and utilize resources or capabilities.
71、an advantage of unrelated diversification is that competencies can be shared and leveraged throughout the value chain activities.
72、an appropriate reason to diversify is to pool the risk from several business ventures to create a more stable income stream.
73、the coordination required to realize value from a diversification strategy based on transferring, sharing, or leveraging competencies is a major source of bureaucratic costs.
74、research finds that the higher the number of business units in a company's portfolio, the easier it is for corporate managers to remain informed about the complexities of each business.
75、the reward system affects motivation; however, the type of organizational culture that develops in a company is primarily affected by the founder’s values and not the reward system.
76、control through culture is ineffective because employees do not internalize values.
77、organizational structure contributes to strategy formulation by providing the framework of tasks and roles that reduce transaction difficulties and allows employees to think and behave in ways that enable a company to achieve superior performance.
78、bradley is a new employee in the sales department at a local car dealership. in his first few months on the job, he will be learning the norms and values of the organization. this refers to organizational socialization.
79、in a firm with a multidivisional structure, corporate managers oversee the actions of divisional managers.
80、the organizational hierarchy is flatter in a multidivisional structure than in a product or functional structure.
81、in a related multidivisional structure, the concept of corporate culture is meaningless.
82、in a multidivisional structure, corporate managers can compare the performance of one division to another in terms of its cost structure or the profit it generates.
83、competition for resources is one of the drawbacks of the multidivisional structure.
84、in the multidivisional structure, each division typically contains only a partial set of value chain activities.
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