High tech industries are often dependent on complementor industries for their mutual
success.
The best part of global strategic alliances is that selection of the right partner does not
affect success of the alliance.
The more utility a company creates for its customers, the more flexibility it has in
determining prices.
Mintzberg’s model suggests a company’s realized strategy is the product of whatever
strategies are actually put into action¾intended and emergent.
Unfortunately, quality as excellence and quality as reliability are concepts that apply to
goods but not services.
There is a negative relationship between the length of time that a customer stays with a
company and profit per customer.
Internal analysis is concerned with identifying a company’s opportunities and
weaknesses.
Texas Instruments achieved early success through engineering excellence. But
thereafter, they became so obsessed with engineering that they lost sight of market
realities. This is an example of the Icarus Paradox.
The coordination required to realize value from a diversification strategy based on
transferring, sharing, or leveraging competencies is a major source of bureaucratic
costs.
SWOT analysis concerns identifying strengths, weaknesses, options, and threats.
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.
A division is a way of grouping functions to allow an organization to better produce and
dispose of its goods and services.
A competitive advantage is considered to be a sustained competitive advantage when
the
A.advantage endures for a number of years.
B.firm is able to spread the advantage to all of its business units.
C.advantage is very large.
D.advantage was gained at a low cost.
E.managers who developed the advantage are still employed at the firm.
Members of the board of directors are supposed to be agents for
A.stockholders.
B.employees.
C.executive officers.
D.customers.
E.suppliers.
Essentially, centralization or decentralization are concepts that refer to the
A.levels where decisions are made in an organization.
B.number of hierarchical levels existing in an organization.
C.numbers of managers in an organization.
D.number of employees in an organization.
E.none of these.
Differentiation is least effective when it is based on
A.physical features.
B.service quality.
C.an appeal to the customer’s psychological needs.
D.reliability.
E.product quality.
The various strategies that companies should adopt to win format wars revolve around
A.getting the federal government to intercede.
B.making network effects work in their favor and against their competitors.
C.effective use of advertising.
D.driving competitors out of business.
E.joint ventures.
Which of the following factors increases pressures for local responsiveness?
A.Powerful buyers
B.Persistent excess capacity
C.Low-cost competitors
D.Differences in customer tastes and preferences
E.Trade barriers
Which of the following statements about the board of directors is false?
A.Board members are elected by stockholders.
B.The board can be held legally accountable for a company’s actions.
C.The board has the legal authority to hire, fire, and compensate the CEO.
D.All directors are full-time employees of the company.
E.Outside directors help perform the monitoring function of the board.
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.
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.
Which of the following statements is not generally true of a diversification strategy
based on the realization of economies of scope?
A.The head office evaluates each business unit as a stand-alone operation.
B.The strategy allows a company to realize cost economies from sharing manufacturing
facilities, distribution channels, advertising campaigns, and research and development
costs among business units.
C.The strategy may allow a company to use shared resources more intensively, thereby
realizing economies of scale.
D.Managers must be aware of the costs of coordination.
E.The strategy requires close coordination among different business units.
Cost leadership is most appropriate when
A.the power of buyers is low and barriers to entry are high.
B.economies of scale are relatively unimportant in manufacturing products.
C.customers have very different needs and uses for the industry’s products.
D.product innovation is the key competitive factor.
E.industry rivalry is high and customers are very sensitive to prices.