At the heart of any company’s business model is the combination of congruent
strategies aimed at creating distinctive competencies that differentiate its products and
result in a lower cost structure.
A joint venture occurs when two equal-sized firms agree to blend their operations,
creating one larger firm.
Taken together, factors such as existing strategic commitments and low absorptive
capacity limit the ability of established competitors to imitate the competitive advantage
of a rival.
Battles to set and control technical standards in a market are referred to as product
positioning.
Starbucks and an independent local caf© both sell coffee and therefore belong to the
same strategic group.
Diseconomies of scale are the unit cost increases associated with a large scale of output.
Alyse is a manager at Across-the-Nation Railroads, a company that wishes to exit a
declining industry and optimize cash flow in the process. Alyse and other managers
should utilize a harvest strategy.
Differentiation on the basis of innovation and technological competency depends on the
research and development function.
Firms with superior strategic capabilities can create profitable new business units at a
much higher rate than most other companies can.
Over the last few decades, the United States steel industry has become less
concentrated.
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.
Because franchisees essentially own their own businesses, they are less motivated to
make the companywide business model work and instead pursue strategies that they
feel are appropriate for their unique circumstances.
Companies 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.
A value chain is a sequence of activities for transforming inputs into outputs that are
valued by customers.
IBM’s investment in mainframe computers is an example of a prior strategic
commitment.
Quality improvement efforts should focus on the
A.product.
B.external environment.
C.customer.
D.material costs.
E.internal operations.
Capabilities refer to a company’s
A.tangible resources.
B.intangible resources.
C.skills at coordinating its resources and putting them to productive use.
D.strategy as expressed in the firm’s business model.
E.policies.
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.Human resources
D.Production
E.After-sales service and support
Managers at WKL Entertainment Inc. are deciding on a global strategy. The company is
looking to sell its services across nations with substantial differences in consumer
preferences and where cost pressures are not too intense. Which strategy should WKL
Entertainment Inc. managers pursue?
A.Global standardization
B.Transnational
C.Localization
D.International
E.Multinational
A technological paradigm shift is most likely to occur in which stage of the industry life
cycle?
A.Embryonic
B.Growth
C.Shakeout
D.Maturity
E.Decline
In the typical scenario planning exercise,
A.most scenarios are pessimistic.
B.most scenarios are optimistic.
C.some scenarios are optimistic and some scenarios are pessimistic.
D.only worst-case outcomes should be considered.
E.only best-case outcomes should be considered.
The competitive structure of an industry refers to the
A.number of segments in the industry.
B.number and size distribution of companies in the industry.
C.the number of consumers in the industry.
D.number of competing products in the industry.
E.form that competition in the industry takes.
Which of the following is not a disadvantage to being a first mover?
A.Significant pioneering costs
B.Tendency to make mistakes
C.Risk of building the wrong resources and capabilities
D.Accumulation of market knowledge
E.Possibility of investing in inferior or obsolete technology
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.
At Zappos.com, the environment is a playful one. Employees often get their pictures
taken wearing silly wigs and ring cowbells to greet guests who come into the
organization. This atmosphere is part of the company’s
A.organizational design.
B.organizational structure.
C.organizational culture.
D.strategic control systems.
E.competitive environment.
To expand its global sales, the U.S.-based foods maker ConAgra purchased a firm that
processes grains in the United Kingdom. ConAgra plans to manage the new business by
allowing it to continue as before, with little integration into the rest of the firm. Based
on this information, which strategy is ConAgra pursuing?
A.Stuck in the middle
B.Transnational
C.International
D.Global standardization
E.Localization
Which of the following is not a consequence of the increased ability of managers to use
information technology as they implement strategies?
A.Flatter hierarchies
B.Greater centralization
C.More timely information
D.Increased use of outsourcing
E.Enhanced innovation capabilities
Which entry mode gives a multinational the tightest control over foreign operations?
A.Exporting from the home country and letting a foreign agent organize local
marketing
B.Licensing
C.Franchising
D.Entering into a joint venture with a foreign company to set up overseas operations
E.Setting up a wholly owned subsidiary
Entry barriers in the embryonic stage are frequently based on
A.brand loyalty.
B.economies of scale.
C.absolute cost advantages.
D.economies of scope.
E.technological know-how.
The growth stage of a product’s life cycle is the
A.time when companies attempt to secure their grip over customers in existing market
segments.
B.best time to explore horizontal merger opportunities.
C.time to plan an exit strategy.
D.opportunity to reduce investment in a product.
E.opportune moment to reduce advertising expenditures.
An emergent strategy is
A.the result of a planned strategy.
B.an unplanned response to unforeseen circumstances.
C.the product of careful top-down planning mechanisms.
D.the same as a realized strategy.
E.a group response to a problem area.
An industry is considered to be high technology, or high tech, when
A.its products are electronic or electrical.
B.the firms in the industry own intellectual property.
C.its products are computers or are related to computers.
D.the firms are innovative.
E.the underlying scientific knowledge that companies in the industry use is advancing
rapidly.
In its African operations, Sony Corporation performs most functions at its Japanese
headquarters but markets through cooperative relationships with local distributors. In
the United States, Sony has decentralized almost all of its tasks to an independent firm
that it owns. Based on this information, which strategy is Sony pursuing?
A.Localization
B.Transnational
C.International
D.Global standardization
E.Stuck in the middle
Good strategic leaders
A.possess a willingness to delegate and empower subordinates.
B.control all facets of decision making.
C.are confident in their ability to make sound decisions without consulting others.
D.assure uniformity of purpose through the exercise of power.
E.have the ability to be inconsistent when the situation requires inconsistency.
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