_______ is an example of a capability that is based in the functional area of
distribution.
a. Effective use of logistics management techniques
b. Effective control of inventories through point-of-purchase data collection
c. Effective organizational structure
d. Product and design quality
All of the following are aspects of the political/legal segment of the general
environment EXCEPT
a. lobby groups.
b. attitudes and values.
c. taxation laws.
d. industries chosen for deregulation.
CaseScenario1:Romulac,Inc.
Romulac Inc. (RI), a subsidiary of a large successful manufacturing conglomerate,
supplies a key component in the assembly of residential cooling systems (air
conditioning units, etc.). There has been tremendous consolidation in RI’s industry, to
the point where only five suppliers of this particular component account for nearly 90
percent of U.S. industry sales. Paralleling this trend, its customers-composed of makers
of branded residential air conditioning units like Carrier and Trane-have seen similar
levels of consolidation in their own industry. Half of these firms produce all their
components in-house, while the balance purchases them from specialized component
manufacturers like RI. RI’s business is extremely capital intensive, and their 40 percent
share of the market allows them to also be the most profitable domestic player. Strong
competitors exist in Europe and Asia. Although like RI, these foreign players’
strongholds are their home regions, with negligible presence outside of the region.
Some of the larger Asian manufacturers have signaled an interest in more aggressively
pursuing the lucrative U.S. market. RI is presently considering a $400 million dollar
investment in a new plant, which will create a component that is much quieter, more
efficient, and is likely to satisfy future regulatory standards. While the core technology
for the new component is very old, RI’s engineering and design skills have allowed
them to retain their low cost advantage, even though the component will represent a
significant improvement over products currently provided by its competition.
Develop an argument as to why RI should hold back and be a second mover with the
new technology.
The focused differentiation strategy differs from the differentiation strategy in that
a. the focused differentiators have a broader competitive scope.
b. the value-creating activities of focused differentiators are more constrained.
c. focused differentiators target a narrower customer market.
d. there are fewer risks with the focused differentiation strategy.
Research has shown that maintaining a low or moderate level of firm debt is critical to
the success of an acquisition, even when substantial leverage was used to finance the
acquisition itself.
a. True
b. False
Evidence suggests that, in general, using an international cost leadership strategy when
exporting to developed countries has the most positive effect on firm performance while
using an international differentiation strategy with larger scale when exporting to
emerging economies leads to the greatest amounts of success.
a. True
b. False
One of the most effective ways to test the feasibility of a future merger or acquisition is
for the firms to first engage in a strategic alliance.
a. True
b. False
Business-level strategies detail commitments and actions taken to provide value to
customers and gain competitive advantage by exploiting core competencies in
a. the selection of industries in which the firm will compete.
b. specific product markets.
c. primary value chain activities.
d. particular geographic locations.
Strategic delegation helps
a. overload middle managers.
b. executives control strategy implementation.
c. avoid too much managerial hubris.
d. emphasize profit maximization.
One capability that can be learned from failure is when to
a. repeat with a modification.
b. add more resources.
c. dig in.
d. quit.
Large-block shareholders typically own at least 5 percent of a corporation’s issued
shares.
a. True
b. False
The technological segment of environmental analysis includes
a. institutions and activities involved with creating new knowledge and translating that
knowledge into new outputs.
b. the determination of when machinery will need to be replaced in a given firm.
c. the need for new technology in order for a firm to gain a competitive advantage.
d. places where a firm’s technology will allow that firm to dominate a given market.