________ economies are achieved by the ability of firms to dictate prices by exerting
market power.
A) Pecuniary
B) Technical
C) Diversification
D) Production
Answer:
Sematech is a producer of computer chips. To gain an advantage over other computer
chip makers, Sematech focuses on reducing its costs below all of its competitors and
has aligned its value chain accordingly. Recently, several of Sematech’s competitors
have begun to reduce the company’s competitive advantage. In response to this threat,
Sematech has decided to add production capacity in an effort to lower costs. If
Sematech’s efforts to increase its production capacity resulted in increased complexity
and an inability of managers to control and operate the firm efficiently, this would be an
example of
A) physical limits to efficient size.
B) worker de-motivation.
C) distance to markets and suppliers.
D) managerial diseconomies.
Answer:
The specific actions a firm takes to implement its strategies are known as
A) competitive advantages.
B) objectives.
C) goals.
D) tactics.
Answer:
Mature industries are characterized by
A) an increase in total industry demand.
B) faster increases in production capacity.
C) a slowdown in the introduction of new products or services.
D) a decrease in the amount of international competition.
Answer:
________ are said to exist when the increase in firm size (measured in terms of volume
of production) are associated with lower costs (measured in terms of average costs per
unit of production).
A) Sustainable competitive advantages
B) Economies of scale
C) Temporary competitive advantages
D) Economies of scope
Answer:
With regard to the threat of suppliers, product differentiation
A) reduces the threat of suppliers because a firm with a highly differentiated product
can pass increased costs on to customers.
B) increases the threat of suppliers because a firm with a highly differentiated product is
unable to pass increased costs on to customers.
C) has no impact on the threat of suppliers.
D) can either increase or reduce the threat of suppliers.
Answer:
General Electric (GE) uses a ________ structure to manage its global operations.
A) transnational
B) centralized hub
C) decentralized federation
D) coordinated federation
Answer:
Recent research suggests that ________ firms must have competitive levels of cost to
survive.
A) low-cost
B) all
C) domestic
D) product-differentiation
Answer:
Which of the following is the best example of forward vertical integration?
A) a car dealership opening up its own automobile manufacturing plant
B) a car company opening its own dealerships to sell its products directly to customers
C) a car company opening its own chain of video rental stores
D) a car company opening a plant to product motorcycles
Answer:
Network industries are characterized by
A) increasing diseconomies of scale.
B) increasing returns to scale.
C) decreasing returns to scale.
D) decreasing economies of scale.
Answer:
Firms such as PepsiCo that operate a number of businesses around the world that share
a number of inputs, production technologies, or distribution channels but none of whose
businesses account for more than 70% of a firm’s revenues are said to be implementing
a
A) related-constrained diversification.
B) related-linked diversification.
C) dominant-business diversification.
D) single-business diversification.
Answer:
When Apple, Inc. opened retail stores to sell its computers and iPods, this was an
example of
A) forward vertical integration.
B) backward vertical integration.
C) forward horizontal integration.
D) backward horizontal integration.
Answer:
________ refers to how costly it is for a firm to alter its strategic and organizational
decisions.
A) Flexibility
B) Dynamic capability
C) Opportunism
D) Uncertainty
Answer:
LaserTech is a manufacturer of industrial lasers and has developed a new, patented
technology that allows its customers to manufacture their products more precisely with
a higher level of consistency and at a lower cost than they could previously. LaserTech’s
executives believe that no rivals have a similar technology and that it would be very
difficult for rivals to copy this technology since the benefits of the new technology can
only be realized within LaserTech’s system, which includes processes that are protected
by trade secrets, making it difficult for rivals to understand the relationship between the
company’s new technology and its competitive advantage. If one of LaserTech’s rivals
were to decide to divest its industrial laser manufacturing business in response to
LaserTech’s new technology, this would be an example of
A) competitive dynamics.
B) tacit collusion.
C) a sustainable distinctive competence.
D) competitive parity.
Answer:
LaserTech is a manufacturer of industrial lasers and has developed a new, patented
technology that allows its customers to manufacture their products more precisely with
a higher level of consistency and at a lower cost than they could previously. LaserTech’s
executives believe that no rivals have a similar technology and that it would be very
difficult for rivals to copy this technology since the benefits of the new technology can
only be realized within LaserTech’s system, which includes processes that are protected
by trade secrets, making it difficult for rivals to understand the relationship between the
company’s new technology and its competitive advantage. The inability of rivals to
develop or acquire technology similar to that of LaserTech is an illustration of
A) resource immobility.
B) resource heterogeneity.
C) causal ambiguity.
D) path dependence.
Answer:
Machines and robots are examples of
A) technological software.
B) economies of scale.
C) learning-curve effects.
D) technological hardware.
Answer:
At the beginning of 2001, Peach Computers competed exclusively in the computer
industry and generated approximately 96% of its revenue from the sales of computers
and computer-related software and approximately 4% of its revenues were generated
from sales of other peripherals. Further, of these revenues, 60% was from sales in the
U.S., 30% was from sales in Europe, 7% was from sales in Asia and 3% was from other
areas. In October 2001, Peach entered the personal electronics industry by introducing a
new MP3 player known as the PeachPit. In developing and selling the PeachPit, Peach
Computers was able to use many of the same R&D facilities, suppliers, production
facilities, and distribution and sales outlets as the computers and software Peach
Computers traditionally sold. By 2003, the PeachPit MP3 Player, accessories for the
unit, and sales of songs on Peach Computers’ NectarTunes website accounted for 35%
of Peach Computers’ revenues.
If, when Peach Computers introduced its PeachPit in 2001, the company used its profits
in the computer industry to subsidize its operations in the electronics industry and used
this subsidy to sell the PeachPit for a price that was less than the cost of producing and
selling the MP3 players, this would be an example of
A) mutual forbearance.
B) escalation of commitment.
C) predatory pricing.
D) multipoint competition.
Answer:
The analysis of firms pursuing a strategy of ________ is logically equivalent to the
analysis of business-level strategies.
A) unrelated diversification
B) related-linked diversification
C) related-constrained diversification
D) limited corporate diversification
Answer:
According to Coach’s website, the company has built a distinctive style and prestigious
image over the past 40 years to develop a reputation as “America’s preeminent designer,
producer, and marketer of fine accessories and gifts for women and men including
handbags, business cases, luggage and travel accessories, wallets, outerwear, eyewear,
gloves, scarves and fine jewelry.” Coach employs a multi-channel distribution channel
to reach its customers, including company-owned stores and boutiques in the stores of
prominent specialty retailers both within the United States and abroad, and the company
operates an online store. Consumers who purchase coach products are generally willing
to pay the premium price due to the superior quality of Coach’s products as well as the
perceived prestige of owning a Coach product. Coach stresses these features in its
advertising campaigns and regularly allows movies and television shows to favorably
feature Coach products in appropriate scenes. Over the last five years. Coach has
partnered with automobile manufacturers such as Lexus to produce automobiles with
Coach interiors. In an effort to expand its international reach, Coach intends to increase
its international distribution and is expanding into Japan through Coach Japan, Inc., a
joint venture with a local company that will allow Coach to control international
distribution and to maintain a consistent brand strategy domestically and abroad.
Which generic business level strategy is Coach pursuing?
A) cost leadership
B) related diversification
C) product differentiation
D) unrelated diversification
Answer:
If your customers value your products more when they have your product and another
firm’s product rather than when they have your product alone, the other firm is
considered to be a
A) competitor.
B) complementor.
C) rival.
D) substitute.
Answer:
________ exist when a firm’s costs rise as a function of its volume of production.
A) Economies of scale
B) Economies of scope
C) Diseconomies of scale
D) Learning curve effects
Answer:
________ economies are scale economies that occur when the physical processes inside
a firm are altered so that the same amounts of input produce a higher quantity of
outputs.
A) Pecuniary
B) Diversification
C) Technical
D) Vertical
Answer:
Which organizational structure is used to implement a vertical integration strategy?
A) matrix
B) functional
C) multidivisional
D) product-divisional
Answer:
A(n) ________ acquisition occurs when the management of a target firm wants to be
acquired.
A) hostile
B) admirable
C) strategic
D) friendly
Answer:
________ are any supplies used by a firm in conducting its business activities.
A) Productive assets
B) Productive inputs
C) Productive outputs
D) Productive inventory
Answer: