At Burger King, multiple items such as a cheeseburger, french fries, and a drink are
combined together to create a complete meal. This is an example of diversification.
One assumption of agency theory is that the principals have more information about the
resources that are being managed than the agents do.
MTV is a good example of a company that has had to pursue a transnational strategy.
Cost leaders ignore the many different market segments in an industry and position
their products to appeal to the average customer.
Fortunately, technical standards always exist in the public domain so that any company
can use them.
Given that they are developed through years of experience, rules of thumb rarely if ever
lead to severe errors in the decision making process.
Companies pursue a global diversification and differentiation strategy when they want
to minimize costs.
The shakeout strategy of share-increasing is put in place by allocating resources to
attract customers from weak companies exiting the market.
A razor-and-blade strategy refers to lowering a company’s cost structure.
In determining its opportunities and threats, a firm should focus on internal processes
and capabilities.
Jeffrey Pfeffer believes that a manager’s political power comes from his or her control
over
A.employees’ paychecks.
B.the firm’s strategic vision.
C.important organizational resources.
D.internal communication channels.
E.the company’s website.
Which of the following factors is crucial in choosing an investment strategy to pursue
and thus maximize the profitability of a company’s business model?
A.The competitive advantage that a company’s business model gives it in an industry
relative to competitors
B.The stage of the industry life cycle
C.The age of the firm
D.The competitive advantage that a company’s business model gives it in an industry
relative to competitors and the stage of the industry life cycle
E.All of these choices
Organizations strive to control employees’ behavior by linking ____ systems to their
control systems.
A.computer
B.disincentive
C.reporting
D.administrative
E.reward
A market segment is a group of
A.customers within a market that can be different from each other on the basis of their
distinct attributes and specific demands.
B.companies that produce similar goods or services.
C.customers within a market that purchase goods or services in similar quantities.
D.customers within a market that have similar levels of profitability.
E.none of these.
There are many real estate offices in most locations. Some of them are small
independent firms; some are larger and affiliated with national chains. Thus, the real
estate sales industry is
A.fragmented.
B.vertically integrated.
C.homogeneous.
D.mature.
E.embryonic.
In the wireless telecommunications industry, different technical standards are found in
different parts of the world. A technical standard known as GSM is common in Europe,
and an alternative standard, CDMA, is more common in the United States and parts of
Asia. Equipment designed for GSM will not work on a CDMA network and vice versa.
Which of the following pressures for local responsiveness does this represent?
A.Global environmental demands
B.Host government demands
C.Differences in distribution channels
D.Differences in customer tastes and preferences
E.Differences in infrastructure
Which of the following industry structures consists of a large number of small and
medium-sized companies, none of which is in a position to determine industry price?
A.Fragmented industry
B.Consolidated industry
C.Oligopoly
D.Monopoly
E.Sector
What is the major purpose of a corporate board of directors?
A.To approve all decisions made by senior managers.
B.To monitor corporate strategy decisions and ensure that they are consistent with
stockholders’ interests.
C.To protect a company’s consumers.
D.To select additional board members.
E.To approve corporate compensation systems.
Customer defection rates are
A.a reflection of customer loyalty.
B.an indication of a company’s ability to satisfy its customers.
C.important to consider because of their potential impact on advertising and marketing
costs.
D.an important consideration because of their effect on sales volumes.
E.all of the above.
____ refers to unit cost increases associated with a large scale of output.
A.Economies of scale
B.Learning effects
C.Diseconomies of scale
D.Flexible manufacturing
E.Mass customization
Innovation refers to the act of
A.seeking patent protection for new products.
B.creating new products and processes.
C.repackaging current products to make them more appealing to consumers.
D.all of the above.
E.none of the above.
Factors of production include all but which of the following?
A.Land
B.Labor
C.Raw materials
D.Ethnic diversity
E.Managerial sophistication
Research and development activities are concerned with
A.product design.
B.production processes.
C.service activities as well as manufacturing activities.
D.intangible as well as physical products.
E.all of these.
Economies of scale may arise from
A.cost reductions gained through mass production.
B.discounts on bulk purchases of raw material inputs and component parts.
C.advantages gained by spreading production costs over a large production volume.
D.cost savings associated with spreading marketing and advertising costs over a large
volume of output.
E.all of these.
A localization strategy
A.involves an appropriate mix of centralization and decentralization.
B.centralizes all functions.
C.centralizes only the research and development (R&D) and marketing functions.
D.is the most complex strategy.
E.is oriented toward local responsiveness.