Patents typically provide the greatest barrier to imitation.
In Porter’s framework, the stronger the five forces, the more limited the ability of
established companies to raise prices and earn greater profits.
Through efficient logistics at Gina’s Grocers, the stock in the stores is automatically
replenished once every week. Management at Gina’s Grocers uses a just-in-time
inventory system.
When a company has differentiated products, they have less pricing options.
Companies pursue a localization strategy when they want to maximize responsiveness
to the unique needs of customers in each country.
Fortunately, substitute products are not a threat if a company is the market leader.
A leadership strategy aims at growing in a declining industry by picking up the market
share of companies that are leaving the industry.
When Amber first started working at a Ford Motor 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 Ford plant experienced cost
savings. These cost savings can be attributed to learning effects.
Controls at each level should provide the basis on which managers at the levels below
design their control systems.
Opportunities arise when a company takes advantage of conditions in its environment
to formulate and implement strategies that allow it to be more profitable.
In a related multidivisional structure, the idea of corporate culture is meaningless.
Financial statements can be a tool of effective governance only if they provide
consistent, detailed, and accurate information.
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.
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.
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.
A differentiated product is a product that
A.looks different from rival products.
B.better satisfies customer needs than rival products do.
C.is packaged in a unique and eye-appealing manner.
D.always costs more than rival products.
E.always costs less than rival products.
A computer manufacturer allows scientists and engineers a certain amount of company
time to work on independent research projects. This company is trying to
A.achieve superior innovation.
B.achieve superior quality.
C.achieve superior efficiency.
D.achieve superior customer responsiveness.
E.minimize the time to market.
In a multidivisional structure
A.support functions, such as accounting, are centralized at the top of the organization.
B.corporate headquarters staff have operating responsibility over the divisional
managers.
C.divisional managers have overall corporate strategic responsibility.
D.corporate headquarters is responsible for overseeing the company’s long-term
multibusiness model and for providing guidance for interdivisional projects.
E.financial controls are necessarily weak given the resource duplication from one
division to another.
Cellular phone service providers often sell the phone itself at very low prices and then
charge a relatively high fee for usage. This illustrates
A.first-mover strategy.
B.competitive cooperation.
C.the razor-and-blade strategy.
D.competitive positioning.
E.format licensing.
The Icarus paradox suggests that
A.companies should stick to a narrowly defined line of products.
B.better-than-average profitability is an elusive goal.
C.companies may become so dazzled by their early success that they believe more of
the same kind of effort will assure future success.
D.companies often pursue too many strategies at once.
E.companies should change strategies before strategies need changing.
Aggressive marketing to jump-start demand for a product often involves all of these
except:
A.substantial upfront marketing.
B.point-of-sale promotion techniques.
C.high introductory prices.
D.use of free sampling.
E.all of these are utilized in aggressive marketing to jump-start demand for a product.
A takeover constraint
A.limits the extent to which managers pursue strategies that are inconsistent with
shareholder interest.
B.prevents a company from being taken over.
C.uses the threat of a takeover to cause the CEO to fear the loss of his or her job.
D.is reduced by corporate raiders.
E.is greatest when a company’s stock price is significantly higher than book value.
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
Which of the following components was an extension of Porter’s original five forces
model?
A.Risk of entry by potential competitors
B.The intensity of rivalry among established companies within an industry
C.The bargaining power of buyers
D.The bargaining power of suppliers
E.The lack of substitutes for an industry’s products
Sam Walton wanted Walmart to keep costs low. Therefore, as an example to others, he
drove his own car and furnished his office with plain, steel desks. In this case, Mr.
Walton was displaying his
A.commitment.
B.ego.
C.astute use of power.
D.emotional intelligence.
E.eloquence.
Which of the following factors that affect market growth rates refers to the degree to
which a new product is perceived as difficult to understand and use?
A.Complexity
B.Relative advantage
C.Compatibility
D.Trialability
E.Observability
A hospital examines its processes closely and then changes them radically to become
more patient-centered. Among the changes are new ways of doing tasks and new
groupings of workers. This is an example of
A.restructuring.
B.reengineering.
C.total quality management (TQM).
D.benchmarking.
E.downsizing.
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
Compared to a differentiator, the cost leader has the advantage over its rivals of
A.making higher profit margins.
B.being better able to withstand the negative influence of powerful suppliers and
buyers.
C.having inimitable production methods.
D.enjoying higher brand loyalty.
E.being preferred by investors.
A stakeholder impact analysis would include which of the following steps?
A.Identification of stakeholders
B.Identification of stakeholders’ interests and concerns
C.Assessment of the likelihood that a stakeholder will file discrimination charges
against the company
D.Identification of stakeholders and their interests and concerns
E.Analysis of ethics violations
Joint ventures
A.are an alternative to new ventures.
B.are attractive when speed is important.
C.are attractive when entry barriers are high.
D.should be done on a small scale.
E.reduce the risk of loss of proprietary knowledge.
Within a diversified company, the responsibilities of corporate-level strategic managers
include
A.translating the corporate mission statement into concrete strategies for individual
business units.
B.closely supervising the formulation of strategies at the functional level that support
the company’s business- and corporate-level strategies.
C.allocating resources to functions within business units.
D.overseeing the development of strategies for the total organization and allocating
resources among its different business areas.
E.identifying and establishing relationships with supplier firms.
A differentiation strategy is based on creating a product that customers perceive as
being
A.about the same as other available products.
B.distinct.
C.the least costly product in the industry.
D.the most costly product in the industry.
E.somewhat faddish in nature.