The disadvantages a firm faces by not being a local player can be cultural and/or
political.
In a product-expansion acquisition, one company buys another that offers essentially
the same products but that has a presence in a geographic market in which the buyer has
no presence.
When transportation costs and automation are both high, then the knowledge-worker
component of the location calculation becomes more important.
Bonus plans allocate a year-end cash award based on an executive’s performance on
multiple dimensions.
Large-scale operations lead to greater flexibility and reduced costs.
The generic strategies that derive from the strategic-positioning model help managers
reduce the effects of intense rivalry on profitability.
Wal-Mart has gained a competitive advantage by locating stores in rural markets.
Learning requires partners to cooperate in transferring knowledge.
An acquisition can raise the financing costs of the target firm when the two firms’
respective credit ratings are markedly different.
Factors that tend to increase rivalry include attributes about firms within the industry
and attributes about the products or markets.
The five forces will impact the differing industry strategic groups in a similar way.
Possible threats to the differentiation strategic position include overfulfilling buyers’
needs and lower-cost imitation.
Reacting to change means foreseeing the emergence of complementary technologies.
Within the executive summary section of a business plan, entrepreneurs would typically
stress only the business concept and not the numbers.
A dimension of cultural differences that pertains to individuals’ willingness to coexist
with questions about the future is called ________.
A)individualism
B)uncertainty avoidance
C)masculinity or predominant values
D)long- or short-term orientation
Succession planning is typically overseen by the board of directors, often with an
outside consulting firm, and usually involves which of the following company
employees?
A)company vice presidents
B)human resources manger
C)current CEO
D)former CEOs
A condition under which the joint output of two or more products within a single firm
results in increased average costs is called ________.
A)parenting advantage
B)synergy
C)diseconomies of scope
D)economies of scope
Tangible resources do not include ________.
A)patents
B)unskilled labor
C)standard inventory components
D)debt financing
Landing highly paid CEOs as directors will probably lead to a board that will be
supportive of ________.
A) paying high wages for CEOs
B) globalization
C) mergers and acquisitions
D) stringent internal monitoring
All of the following are possible strategies that will provide a solid basis for identifying
market opportunities except ________.
A) new-market creation
B) new-market disruption
C) low-end disruption
D) high-end disruption
An individual who hires another to act on his/her behalf is referred to as a(n) ________.
A) principal
B) manager
C) executive
D) agent
The type of compensation that some boards think is better at truly aligning the
incentives of managers with those of shareholders is a(n) ________.
A) bonus
B) restricted stock grant
C) raise
D) mixed compensation portfolio
An important insight from the value net model is that the same player might ________.
A)be the industry leader one year and at the bottom of the industry the next year
B)be a winner and a loser in the same transaction
C)be a competitor in some interactions but a complementor in others
D)grow and compress in the same timeframe
Which of the following is not an option for a firm to expand the scope of its operations?
A)vertical
B)horizontal
C)geographic
D)perpendicular
The most complex multiparty alliances are in the ________ arena.
A)entertainment
B)technology
C)automotive
D)home building
A practice by which a firm builds cost advantages through centralized, global-scale
operations is called ________.
A)transnational vision
B)global vision
C)international vision
D)multinational vision
Business-strategy alliances are fundamentally related to a firm’s core business through
________.
A)vertical relationships
B)horizontal relationships
C)complementary relationships
D)all of the above
Diversification increases firm ________.
A)costs
B)simplicity
C)complexity
D)revenues
A pension fund that manages large sums of money for third-party investors is referred
to as a(n) ________.
A) capital investor
B) market analyst
C) institutional analyst
D) institutional investor
Businesses can be related along several different dimensions including all of the
following except ________.
A)similarity in markets
B)use of resources
C)reliance on comparable dominant logic
D)reliance on contextual economic logic
Explain the relationship between diversification and performance.
What are some of the factors that a firm should consider before choosing a first-mover
strategy?
What is the network structure?
What motivates a firm to expand geographically?
What is the relationship between international strategy and economies of scope and
scale?
To what extent should the target firm and acquiring firm remain strategically
independent?