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.
The building blocks of competitive advantage are efficiency, quality, innovation, and
profitability.
The layout of the keys on a computer keyboard is an example of a technical standard.
Switching costs are the costs that consumers must bear to switch from a product based
on one technological standard to a product based on another.
Strong brand loyalty and high customer switching costs are low barriers to entering an
industry.
An important ingredient of success in a strategic alliance appears to be cultural
sensitivity.
To pursue a successful business model, managers must be careful to ensure that the set
of business-level strategies they have formulated and implemented are working in
harmony to support each other.
Walmart pursues a low cost operator policy.
Free cash flow refers to additional funds from a government stimulus program.
When buyers are in a weak bargaining position, companies in the supplying industry
must lower their prices to increase profits.
Market segmentation is best described as what type of process?
A.Static
B.Regressive
C.Evolving
D.Normative
E.Revolving
Which of the following is currently an embryonic industry?
A.Personal computers
B.Biotechnology
C.Internet retailing
D.Nanotechnology
E.Wireless communications
An international strategy
A.centralizes only the research and development (R&D) and marketing functions.
B.centralizes all functions.
C.involves an appropriate mix of centralization and decentralization.
D.is the most complex strategy.
E.maximizes local responsiveness.
When managers pay bribes to gain access to lucrative business contracts, they are
engaging in
A.opportunistic exploitation.
B.utilitarian ethics.
C.self-dealing.
D.information manipulation.
E.corruption.
The multidivisional organization structure offers all of these advantages except:
A.enhanced corporate financial control.
B.enhanced strategic control.
C.enhanced growth.
D.stronger competition for resources.
E.all of these are advantages of multidivisional organizational structure.
Customer responsiveness includes which of the following?
A.Identifying and satisfying customer needs
B.Improving the quality of a company’s products
C.The willingness to customize products for customers
D.Superior product design
E.All of these
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
A company’s competitive advantage is more durable when
A.barriers to imitation are low and there are few capable competitors.
B.barriers to imitation are high and there are many capable competitors.
C.barriers to imitation are high.
D.the industry is stable and there are many capable competitors.
E.the industry is stable and barriers to imitation are low.
An adequate supply of complements to a product helps ensure that consumers
A.will buy the company’s product.
B.will experiment with the products of other companies.
C.will buy the complements to use with the products of other companies.
D.all of these choices.
E.none of these choices.
All of these apply to Amazon.com and eBay except:
A.used the Internet to increase retail sales.
B.employed technology to consolidate what had previously been a fragmented industry.
C.pursue a cost-leadership model.
D.merged with each other to compete with Borders.
E.all of these apply to Amazon and eBay.