When a company raises capital through an IPO, it generally exchanges only a small
portion of the firm’s stock for financial capital.
The legal and political environments are often interrelated in that laws and regulations
only change when politicians decide the changes are necessary.
Alliances tend to be low-risk and high-return vehicles for realizing a firm’s strategy.
If partners combine resources and capabilities, they may be able to create a stock of
resources that is unavailable to other competitors in the industry.
The professional partnership transfers ownership and shifts all local management
responsibility to local facilities.
Successful differentiation enables firms to set prices at the industry average and gain
market share.
Strategy implementation often fails because of managers’ inability to assess potential
implementation obstacles.
Age and lifespan demographics may be critical sociocultural factors in a successful
business.
Property rights are the most clear-cut example of resources and capabilities that are
difficult to imitate.
The business plan is usually developed prior to the launch because its purpose is to
obtain financing or to generate market interest.
Incentives tied to current stock prices increase the likelihood that executives will make
necessary capital investments.
A successful attempt to integrate low-cost and differentiation positions is called
straddling.
With regard to competitive unpredictability, strategy research shows that challengers
must launch many assaults on the industry leader in a short period of time.
Cultural clashes can facilitate the integration of two firms.
Supplier power is influenced by exit barriers, industry growth, and industry
concentration.
The processes of formulation and implementation are iterative and interdependent.
Acquisitions typically provide the most rapid entry into a market.
Marginal cost is the cost of ________.
A)raw materials and labor
B)the last unit of production
C)rent and equipment
D)all expenses incurred by the firm
An analytical tool that enables managers to calculate profits at various points along an
industry value chain is called a ________.
A)activity chain
B)profit pool
C)U-curve
D)S-curve
Typically in the ________ section of the business plan, managers will provide a
discussion of competitors or potential competitors and why the product will have a
competitive advantage.
A) executive summary
B) products and services
C) market analysis
D) marketing and sales plan
The specific rivals that are most pertinent to strategic-group analysis are ________.
A)those who may backwardly integrate
B)those in the firm’s same strategic group
C)those in an overlapping strategic group
D)those in complementary strategic groups
The best scorecards let managers know how the strategy is going before they see the
company’s ________.
A)growth projections
B)financial numbers
C)customer totals
D)vendor totals
The New York Stock Exchange requires that the audit committee of boards of directors
be composed of ________.
A) outsiders only
B) insiders only
C) a combination of outsiders and insiders
D) men and women
Executive activities can be divided into three basic areas that include interpersonal,
informational, and ________.
A)managerial
B)supervisory
C)decisional
D)relational
The starting point in the portfolio planning process requires the firm to analyze
businesses in terms of their ________.
A)similarity and stability
B)dissimilarity and market share
C)market share and growth prospects
D)customer base and employee credentials
Coke and Pepsi enjoy economies of scale in all but which of the following markets?
A)soft drinks
B)coffee beverages
C)noncarbonated beverages
D)bottled water
All of the following are aspects of organizational structure except ________.
A.units
B.hierarchy
C.budgeting
D.authority
During the ________ stage of the industry life cycle, many firms consider the strategy
of exiting the industry.
A)embryonic
B)growth
C)erosion
D)decline
The criterion of rarity requires that a resource be scarce relative to ________.
A)demand
B)competitors
C)commodities
D)value added
The process of managing a well-planned and well-executed transition from one CEO to
another is called ________.
A)human resource planning
B)leadership planning
C)managerial development
D)succession planning
Which of the following is not a true statement concerning the role of the board of
directors?
A) They represent the shareholders’ interests.
B) They may hire and fire top management.
C) They establish executive compensation.
D) They are always independent.
Which of the following is not true concerning turnaround management?
A) Time is not a factor.
B) Every turnaround is unique.
C) The importance of each stage will vary.
D) Stages may run concurrently.
A revolutionary firm is one that ________.
A)discovers and leads convergence
B)falls behind in an industry
C)is in the munitions industry
D)causes heads of government to fall
The PESTEL analysis is a tool for assessing the political, economic, sociocultural,
technological, environmental, and ________ contexts in which a firm operates.
A)longitudinal
B)legal
C)long-term
D)logistical
Which of the following statements best describes the second step of stakeholder
analysis?
A)determine the influences on strategy formulation
B)determine stakeholders’ power and influence over decisions
C)determine the roles of the individuals who comprise a stakeholder group
D)determine the effects of strategic decisions on the stakeholder groups
Economies of scope are possible when companies can leverage a value-chain activity
across more than one or all of the following except ________.
A)product
B)service
C)geographic arena
D)strategy
Industries in which the partnership form of structure is common include all except
________.
A) legal offices
B) private schools
C) advertising agencies
D) real estate companies
Which of the following is not a compliance rule resulting from the Sarbanes-Oxley Act?
A) A substantial majority of directors must be independent.
B) Personal loans to executives from corporations are prohibited.
C) Brokers must disclose if the public company is a client.
D) Auditors must list nonaudit services they are unable to perform during an audit.
A firm with a competitive advantage based on differentiation markets unique products
for which customers are willing to pay a premium price. The attributes of the products
are discernibly higher than competitors’ and include all but which of the following?
A)availability
B)quality
C)reliability
D)prestige
Which of the following factors relates to staging as described in the business strategy
diamond?
A.market segments
B.speed of expansion
C.product styling
D.business alliances
To overcome a supplier’s reluctance to making a large investment for the benefit of one
buyer, the buyer may need to integrate vertically backward into the supply chain by
________.
A)developing an internal division that becomes the supplier
B)finding multiple similar suppliers
C)partnering with another similar firm
D)making an acquisition
What are the two primary concerns of corporate strategy?
What is a real option?
What are the three Cs of strategy communication? Briefly explain.
What are three of the entry barriers in the carbonated beverage industry?
What are resources? What are the two types of resources?
Discuss the questions firms may use to determine the issue of alliance fit.
What does the strategic management of industry evolution involve?