When industry profits fall below normal levels, competition usually decreases.
The strategic leader emphasizes the efficient execution of a given plan.
If new technology is introduced by a new entrant, it stands a good chance to attain
market dominance.
A firm that achieves competitive advantage can usually maintain it over time.
Complex firms are more difficult to manage than simple firms.
International expansion is actually a movement along a continuum from known markets
to less-known markets.
Scope economies are defined as the ability to lower average costs by sharing a resource
across different products.
Differentiators are defined as areas where a firm chooses to compete in the marketplace.
In the global configuration, local units are highly dependent on home office
coordination of resource allocation and decision approval.
Managers must remain focused on firm-specific characteristics when conducting
industry analysis.
Mature industries often undergo consolidation.
Firms run by executives with high levels of stock ownership are much less likely to
pursue acquisitions and divestitures.
Corporate-level strategy allows business units to operate independently of one another.
Stereotyping means ascribing limiting characteristics to an entire set of people.
To secure needed resources, large firms often move “downstream” in the industry value
chain.
Internal development is typically more expensive than acquisitions.
Differentiation involves all of the following except ________.
A)premium brand image
B)unique styling
C)low costs
D)customization
The minimum efficient scale (MES) is the output level that delivers the ________.
A)highest possible revenues
B)lowest possible costs
C)highest possible net
D)lowest margin
Diversification into upstream or downstream industries is called ________.
A)synergistic integration
B)vertical integration
C)horizontal integration
D)related diversification
All of the following are well-known companies pursuing the low-cost leadership
strategy except ________.
A)Wal-Mart
B)Dell
C)Honda
D)Cargill
When mergers and acquisitions are undertaken in pursuit of synergy which of the
following relationships describes the beliefs that guide managers. Let A and B represent
the firms involved.
A)value of A and B merged > value of A + value of B if the firms remain separate
B)value of A and B merged = value of A + value of B if the firms remain separate
C)value of A and B merged < value of A + value of B if the firms remain separate
D)value of A minus B > value of A + value of B if the firms remain separate
Demographics refers to all but which of the following?
A)education
B)gender
C)nationality
D)race
Economies of scale result from a variety of efficiencies including all of the following
except ________.
A)superior inventory management
B)exercising purchasing power
C)spending less on advertising or R&D
D)specializing in a specific production process
Research suggests that revolutionary strategies that can introduce dynamic change tend
to fall into one of three categories that include all except ________.
A)mid-term disruptions
B)high-end disruptions
C)low-end disruptions
D)hybrid
In which of the following countries are national and state governments not usually the
major shareholders of public companies?
A) Germany
B) Japan
C) Canada
D) China
When strategists think about a proposed diversification move, they must assess the
extent to which their firm’s resources and capabilities match the ________.
A)needs of potential subsidiaries
B)needs of their own firm
C)production schedule
D)capabilities of potential subsidiaries
The value of a firm’s portfolio of resources and capabilities is directly affected by
________.
A)the reactions of competitors
B)the dynamic nature of the competitive environment
C)management’s risk tendency
D)its capability to reconfigure resources
The disadvantage associated with being an entering player in the market is referred to
as liability of ________.
A)newness
B)governance
C)foreignness
D)coordination
All of the following are notable acquisition mistakes except ________.
A)AT&T’s acquisition of NCR
B)Quaker’s acquisition of Snapple
C)AOL’s acquisition of Time Warner
D)eBay’s acquisition of PayPal
All of the following are informal roles played by the board of directors except
________.
A) reviewing the firms’ strategy
B) transporting information from external sources
C) providing leads for acquisition candidates
D) providing advice for the CEO and other executives
The benefits of cellular manufacturing practices include all except which of the
following?
A) flexibility
B) reduced margins
C) reduced lead time
D) decreased inventory
A Greek term used in business to denote excess pride, overconfidence, or arrogance is
________.
A)synergy
B)polycon
C)halycon
D)hubris
Which of the following areas usually pertains only to larger firms and those that
otherwise use alliances as a key vehicle for strategy execution?
A)being able to manage knowledge and learning
B)creating a dedicated alliance function
C)understanding alliance evolution
D)understanding the determinants of trust
In a strategy map of the balanced scorecard, customer management processes are
concerned with which of the following areas?
A) supply
B) retention
C) safety and health
D) community
The functional organizational model can exacerbate problems in ________ firms.
A) multiproduct, multimarket
B) single product, single market
C) multiproduct, single market
D) single product, multimarket
When the vision of a firm, its strategy, and the industry conditions are not aligned, the
lack of coherence almost always causes the firm to ________.
A)slip behind competitors
B)go out of business
C)fire managers
D)suffer low employee morale
What are the possible costs associated with geographic diversification?
What is the value-net model?
What is a merger?
Discuss step 1 of stakeholder analysis: Determining Influences on Strategy
Formulation.
How does the text define strategic leadership?
What are liability of newness and liability of foreignness?
What are the two concepts critical to evaluating opportunities for diversification and
value creation?
How can managers best determine if their industries have globalized or are in the
process of globalizing?
Why is it easier for a new entrant to imitate value-chain activities?
Explain the five-step process used to test the quality of a firm’s strategy.