When an industry is characterized by perfect competition, rivals in the industry will
achieve above-average levels of profitability.
Strategies provide solutions to problems.
The burden placed on firms by their nation’s codes of best practice varies across the
globe.
A firm’s corporate strategy is created annually and remains stable until the following
year.
Organizational structure is the least important of all three major strategic levers.
Sometimes, how easily laws may change can affect a firm’s strategy.
Executives with large proportions of their pay packages derived from stock options tend
to be extremely risk averse.
Economies of scope generally arise from bundling and joint-selling opportunities.
A key strategy for shareholders is to align the interests of executives with their own, or
closely monitor and control what executives do.
Strategy is important to every firm, but the Internet changes quarterly, which elevates
strategy to a mission-critical task.
The strategy-diamond and VRINE are not strategy formulation tools.
With a sole-sourcing arrangement, buyers expect that suppliers will provide materials at
the exact point in time that they are needed in the production process.
Firms must balance the requirements of entrepreneurial ventures with the benefits of
sustained linkage to the parent firm.
The smaller the differentiation, the smaller the market segment to which a product will
appeal.
Environmental factors do not contribute to the costs of operating a business.
Ideologies are the deeply held and broadly shared beliefs about what drives success
within an industry.
When there are many businesses and they are largely unrelated, the firm is referred to as
a conglomerate.
Firms establish stock ownership policies in an attempt to ensure that executives act in
the best interests of the shareholders.
When a functional unit focuses too narrowly on its own goals and operations and loses
sight of other functional activities, customer needs, and corporate objectives, it is said
to be acting like a functional ________.
A) corral
B) barn
C) silo
D) tower
________ corporations may be better than both alliances and market forces in
facilitating the flow of knowledge across borders.
A)Domestic
B)Multinational
C)International
D)Conglomerate
A strategy that targets the least desirable of incumbents’ customers is referred to as
________.
A)mid-term disruption
B)high-end disruption
C)low-end disruption
D)hybrid
One of the most fundamental tradeoffs managers make today is whether to ________ a
historically integral value-chain activity.
A) sell
B) acquire
C) outsource
D) expand
Higher equity multiplication means that a firm is using a greater amount of ________ to
finance its productive assets.
A)income
B)collateral
C)debt
D)resources
Several factors influence the threat from new entrants including economies of scale,
brand identity, and ________.
A)switching costs
B)buyer volume
C)price sensitivity
D)supplier concentration
The best description of goals is which of the following?
A)a broad indication of organizational intentions
B)intentionally vague and ambiguous
C)specific measurable outcomes
D)statements of organizational purpose
In a geographic roll-up acquisition, the objectives include ________.
A)efficiency of larger operations
B)synergy of similar but expanded product lines or geographic markets
C)eliminating capacity, gaining market share, and increasing efficiency
D)anticipation of new industry emerging and culling resources from firms in multiple
industries whose boundaries are eroding
Some industries are dynamic simply because of ________.
A)the rapid pace of change
B)the number of competitors
C)the market concentration
D)the five forces
The geographic-diversified firm must ensure that the benefits of being international
outweigh the added costs of the ________ necessary to support its nondomestic
operations.
A)human resources
B)infrastructure
C)raw materials
D)learning
Mercedes Benz is the world’s leading manufacturer of premium passenger cars because
it has a reputation for all but which of the following?
A)producing cars at the fastest rate in the industry
B)innovative engineering
C)styling that appeals to buyers who will pay premium prices
D)effective safety features
Revenue-enhancement synergy may result from a variety of tactics, including
________.
A)selling products singularly to capitalize on learning curve effects
B)specializing distribution channels
C)sharing complementary knowledge to encourage new product innovation
D)dispersing products into individual markets
According to data compiled from SDC Platinum in Exhibit 10.4, acquisition activity
peaked closest to the year ________.
A)1988
B)1993
C)1998
D)2003
All of the following are possible alliance risks except ________.
A)sufficient sharing of proprietary technology
B)poor contract development
C)misrepresentation of resources and capabilities
D)misappropriation of resources and capabilities
According to the CAGE framework, all of the following are examples of products most
affected by cultural distance except ________.
A)TV
B)cement
C)foods
D)cars
The most effective firms around the globe view their organizations as portfolios of
processes. These processes include entrepreneurial, capability-building, and ________.
A)renewal
B)far thinking
C)reflective
D)dynamic
A supplier may not make an investment that is specific to one buyer for all except
which of the following reasons?
A)The investment would tie the supplier too closely to one buyer.
B)The investment would expose the supplier to too many risks.
C)The investment would increase sales beyond what the supplier could handle.
D)The investment would overtax the supplier’s financial means.
Acquisitions have implications for the financial success of strategies, or in other words
the realization of the anticipated ________ of the strategy.
A)economic logic
B)competitive advantage
C)knowledge increase
D)margins
Parties to an overcapacity are trying to ________ the industry.
A)slow down
B)eliminate
C)consolidate
D)expand
Social capital is defined as ________.
A)the advantage created by a person’s location in a structure of relationships
B)a pool of reserve funds designated for a company’s social activities
C)the group within an organization that is perceived to contain the social leaders
D)the most important social network associated with a company
The ability to adapt to change or to initiate it is most important in industries where
________.
A)the industry products are standard
B)future competition is difficult to forecast
C)technological change is static
D)product demand is stable
Which of the following best describes level 2 of the Level 5 Hierarchy?
A)Leaders must demonstrate teamwork abilities.
B)Leaders must prove their competency.
C)Leaders must show their ability to manage people.
D)Leaders must prove they are capable of leading a large organization.
A senior manager is reviewing the components of the strategy diamond with her staff.
When naming the five major components, she lists all of the following except
________.
A.competitors
B.vehicles
C.differentiators
D.staging
The PESTEL analysis helps managers gain a better understanding of ________.
A)their internal strengths and weaknesses
B)the opportunities and threats they face
C)the five competitive forces
D)stakeholder needs
All of the following may contribute to a weak finance function except ________.
A) an unqualified audit report
B) an unbalanced executive team
C) inadequate financial controls
D) a weak auditing function
What is the Sarbanes-Oxley Act?
Why do firms generate more profits out of their R&D investments if they are also
highly global?
What are born-global firms?
What factors tend to increase rivalry?
What are some possible actions that may result in revenue-enhancement synergy?