Core competencies do not create value in a business.
Choosing which new entry strategy is best depends on competitive financial and
marketplace considerations with the greatest opportunities most likely to be in existing
markets, rather than in new markets.
For young managers who see themselves as free agents, behavioral controls such as
rewards and culture can be an effective way to enhance organizational loyalty.
Closure, in contrast to bridging relationships, stresses the importance of ties connecting
heterogeneous people.
An advantage of a firm entering into a strategic alliance is that it does not have to share
the wealth with its partners.
Spandex, founded in 2000, created footless pantyhose and other undergarments for
women. This is an example of an imitative new entry strategy.
The two principal means by which firms achieve synergy through market power are
pooled negotiating power and corporate parenting.
Business-level strategy focuses on (1) what businesses to compete in, and (2) the
management of the business portfolio to create synergy among its businesses.
Running Press created a line of palm-sized mini books that were sold as point-of-sale
impulse items. The company grew rapidly, even though it had a small fraction of the
sales in the publishing industry. They used a pure overall cost leadership strategy to
capture market share.
Vision is an important element of entrepreneurial leadership because _____________.
A. the entrepreneur has to envision realities that do not yet exist
B. a vision statement must be part of the documentation used to obtain venture
financing
C. organizations cannot function without a detailed and operational vision
D. banking institutions require it
Which of the following is not a characteristic of effective reward and incentive
systems?
A. Performance measures are clear and highly visible.
B. The structure is fixed to assure employees of consistency.
C. The compensation system is perceived as fair and equitable.
D. Objectives are well understood, and broadly accepted.
Due to the Internet, firms that use a focus strategy have new opportunities to
_________.
A. respond quickly to customer requests
B. provide more services and features
C. access niche markets in a highly specialized fashion
D. access markets less expensively
Examples of __________ include: To be the happiest place on earth (Disneyland), and
Restoring patients to full life (Medtronic).
A. vision statements
B. mission statements
C. strategic objectives
D. operational objectives
Taking advantage of the increasing penetration of personal computers in American
homes, the Mayo Clinic transformed itself as a provider of health-related knowledge
and expertise. It took advantage of the ______ trends of the _______ in the prices of
PCs and the ____________ presence of PCs in virtually every home in the U.S.
A. soft; increase; increasing
B. soft; decrease; decreasing
C. hard; decrease; decreasing
D. hard; decrease; increasing
For a core competence to be a viable basis for the corporation strengthening a new
business unit, there are three requirements. Which one of the following is not one of
these requirements?
A. The competence must help the business gain strength relative to its competition.
B. The new business must be similar to existing businesses to benefit from a core
competence.
C. The collection of competencies should be unique, so that they cannot be easily
imitated.
D. The new business must have an established large market share.
Innovations that extend sales in an existing market, usually by enabling new products or
services to be sold at higher margins are known as _____________.
A. radical innovations
B. disruptive innovations
C. technology innovations
D. sustaining innovations
Smell-O-Vision designed an invention to pump odors into movie theatres. It flopped, in
spite of its innovativeness. What kind of new entry strategy was the company using to
penetrate the market?
A. imitative
B. pioneering
C. adaptive
D. differentiated
The text discusses three approaches to combining overall cost leadership and
differentiation competitive advantages. Which of the following is not one of these three
approaches?
A. automated and flexible manufacturing systems
B. exploiting the profit pool concept for competitive advantage
C. deriving benefits from highly focused and high technology markets
D. coordinating the extended value chain by way of information technology
Which of the following is not an advantage of a strategic business unit (SBU) type of
organizational structure?
A. Divisions with similar products, markets, or technologies are formed into
homogeneous groups that can achieve synergies.
B. Divisional executives can respond quickly to market changes and opportunities.
C. Planning and control by the corporate office is more manageable.
D. The corporate office is more removed from the individual divisions.
According to value-chain analysis, which of the following would be considered part of
the general administration in a firm?
A. human resource management
B. technology development
C. information systems
D. procurement
Barriers associated with a managers tendency to look at issues from a biased or limited
perspective are known as _____________.
A. systemic barriers
B. behavioral barriers
C. political barriers
D. barriers to exit
Vision statements are used to create a better understanding of the overall purpose and
direction of the organization. Vision statements:
A. are very specific
B. provide specific objectives
C. set organizational structure
D. evoke powerful and compelling mental images
Which of the following is the most important resource for a start-up activity?
A. social recognition
B. land
C. personnel
D. money