A product’s appeal to customers’ psychological desires cannot be considered a source of
differentiation.
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.
A set of related technical standards that specify the common set of features or design
characteristics of a product is called a dominant design.
The Icarus paradox suggests that those factors that led to a company’s success will
continue in the future because the competitors cannot imitate them.
Bradley is a new employee in the sales department at a local Ford dealership. In his first
few months on the job, he will be learning the organizational culture which is called
organizational socialization.
Apple, Amazon.com, and eBay have used the Internet as a way to become broad
differentiators.
Distinctive competencies shape the functional-level strategies that a company can
pursue.
All resources are tangible; there is no such thing as intangible resources.
While they do a good job of increasing employee satisfaction, positive incentive
systems do little to maximize long-run profitability.
A company that makes and sells the same product in many different countries often
groups its overseas divisions into ____ to simplify the coordination of products across
countries.
A.world regions
B.horizontal areas
C.six areas
D.local regions
E.none of these
When corporate CEOs and top managers use their power and control over funds to
satisfy their personal desires for wealth or status, this is called
A.on-the-job consumption.
B.agency theory.
C.information asymmetry.
D.a tradeoff between stakeholders.
E.a performance measurement.
When automobiles first became available to the public, it was difficult for buyers to
find products such as tires, gasoline, and light bulbs for their cars. Early automobile
owners
A.faced a first-mover disadvantage.
B.lacked complementary products.
C.were locked out of the market.
D.lost the format war.
E.were too innovative.
Which of the following is not one of the factors in the economic forces of the
macroenvironment?
A.Interest rates
B.Inflation
C.Regulation
D.Currency exchange rates
E.Economic growth rate
Dale’s horseshoeing methods save time and money for his employer, but when Dale
suggests that everyone use his method, his boss says, “No. That’s not the way we’ve
always done it around here.” Dale’s employer is suffering from
A.organizational inertia.
B.prior strategic commitments.
C.barriers to mobility.
D.lack of distinctive competencies.
E.the Icarus paradox.
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.
A component of strategy implementation is
A.designing the best organization structure, culture, and control systems to put a
strategy into action.
B.enumerating the number and kind of periodic reports that must be submitted by
functional-level managers.
C.analyzing the macroeconomic environment of the company.
D.answering the question, “What is our business?”
E.all of these choices.
A product can be thought of as a(n)
A.package of possibilities.
B.configuration of parts.
C.one-time purchase.
D.package of attributes.
E.series of alternatives.
The two main innovations in a multidivisional structure (over a functional or product
structure) are
A.a matrix structure at the divisional level and a flat structure at the corporate level.
B.a product structure at the divisional level and a functional structure at the corporate
level.
C.the organization of business units or companies in each industry in which it competes
into one or more divisions and the creation of corporate-level positions to oversee the
activities of divisional managers.
D.self-contained divisions with operating responsibility and a group of divisional
managers with collective strategic responsibility.
E.a matrix structure at the divisional level and a functional structure at the corporate
level.
Stanley’s services firm wants to enter an embryonic market, but it doesn’t have enough
cash to purchase the required assets. Which of the following strategies would you
recommend to Stanley?
A.Diversify through acquisition
B.Do not diversify at all
C.Diversify with an internal new venture
D.Diversify with a joint venture
E.Diversify through vertical integration
Jordan’s ice cream stand offers different combinations of premium flavors, cones, and
toppings to create hundreds of extravagant, customized products. Which generic
strategy is Jordan following in the restaurant industry?
A.Cost leadership
B.Differentiation
C.Focused cost leadership
D.Focused differentiation
E.Both cost leadership and differentiation simultaneously
When technological change is low and customer needs are well established and
standardized, the most appropriate generic strategy to pursue is
A.market concentration.
B.differentiation.
C.focus.
D.asset reduction.
E.cost leadership.
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.No market segmentation
B.Low market segmentation
C.Medium market segmentation
D.High market segmentation
E.Focused market segmentation
A company pursuing a focus strategy
A.attempts to serve all market segments.
B.concentrates on building market share in one market segment.
C.typically has more resources at its disposal than a differentiator does.
D.need not be concerned that a differentiator will try to imitate the company’s products
or services.
E.none of these.
Eventually most industries enter a decline stage where
A.growth becomes negative.
B.rivalry among established companies usually decreases.
C.competitive pressures abate.
D.excess capacity declines.
E.demand continues to hold steady.
General organizational competencies are found
A.in the skills of a company’s top managers and functional experts.
B.at low levels in the organization.
C.among technology professionals.
D.within a company’s strategic core.
E.in an organization’s tangible resources.
Which of the following strategies for fragmented industries grants the right to use the
parent’s name, reputation, and business model in a particular location or area in return
for a fee and often a percentage of the profits?
A.Chaining
B.Horizontal merger
C.Vertical merger
D.Franchising
E.B2B
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.
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.
A nation’s companies gain competitive advantage if their domestic customers are
A.nondemanding purchasers.
B.able to obtain products or services in other countries.
C.sophisticated and demanding.
D.willing to spend money on novelties.
E.not willing to accept low-priced products.