Differentiation leads to high brand loyalty, which in turn significantly increases the
threat of new firms entering the industry.
Honda redefined the U.S. motorcycle industry with a brilliantly conceived intended
strategy.
Clothing companies Aeropostale and Forever 21 compete for the same group of
customers which consists of females aged 18-24. These two companies would be part of
different strategic groups because they use different marketing strategies to reach their
customers.
Microsoft Word, the word-processing software, is so easy to use and has so many useful
features that no other software can compete with it. Therefore, Microsoft Word can be
described as a killer application.
In the 1990s, Sotheby’s and Christie’s, the two largest fine-art auction houses in the
world were colliding to fix prices. These practices are acceptable in the business world
to create competitiveness through collaborations.
The feedback loop in the model of the strategic management process indicates that the
process is ongoing; it never ends.
The bottled water industry created new competitors for Coca-Cola, but did not change
the basic industry boundaries.
Economies of scale may be found
A.in several of a company’s departments.
B.only in manufacturing operations.
C.principally in research and development activities.
D.primarily in administrative areas of a company.
E.none of these.
One strategy used to consolidate fragmented industries is
A.vertical mergers.
B.chaining.
C.product proliferation.
D.price signaling.
E.nonprice competition.
In which of the following cases are bureaucratic costs likely to be lowest?
A.A vertically integrated company with five divisions that pursues full integration
B.A company with five divisions that pursues related diversification based on
economies of scope
C.A company with five divisions that pursues related diversification based on
transferring competencies
D.A company with five divisions that pursues unrelated diversification based on
acquisitions and restructuring
E.A company with twenty divisions that pursues taper integration
At Tyco Inc., rules are published at the cubicle of all employees stating what is
expected of them regarding time to arrive, time for lunch, when to take breaks, and
when to socialize. This is an example of which of the following?
A.Output control
B.Personal control
C.Behavior control
D.Conversion activities
E.Strategic competencies
Although stockholders are legal owners, CEOs do not always pursue stockholders’
interests. CEOs can pursue their own interests because
A.they can use their authority over corporate funds to satisfy their desires for status,
power, and income.
B.they have the ability to initiate a leveraged buyout.
C.an outside director will not have knowledge of inside operations if he or she chairs
the board.
D.stockholders are the weakest stakeholder group because they are removed from
operations.
E.stockholder meetings are not required.
In high-technology industries, the underlying scientific knowledge companies use is
A.increasing slowly.
B.advancing rapidly.
C.steadily decreasing.
D.tripling every quarter.
E.becoming stagnant.
Strategic implementation involves
A.taking actions at the functional, business, and corporate levels.
B.comparing company performance with leading companies in the industry.
C.analyzing the macroenvironment for any last-minute changes that may have occurred.
D.only activities at the corporate level.
E.all of these choices.
Delta Airlines used to advertise its high-quality air travel service by saying it flew
“anywhere, anytime.” What generic strategy is represented by this advertisement?
A.Cost leadership
B.Differentiation
C.Stuck in the middle
D.Focused differentiation
E.Both cost leadership and differentiation simultaneously
Due to a recent relaxation in pollution standards, Ford Motors is withdrawing its
electric-powered cars from sales in the U.S. market. Ford is responding to a change in
which of the following macro environmental forces?
A.Economic
B.Demographic
C.Political and legal
D.Social
E.Strategic
Killer applications are applications or uses of a new technology or product that
A.are so compelling they persuade customers to adopt or use the new technology in
droves.
B.drive consumers to the products or technology of another company.
C.repulse new customers.
D.kill demand for the product or technology.
E.backfire on the company producing them.
Which of the following is not a guideline for a successful acquisition?
A.Good bidding strategy
B.A clear strategic rationale for making the acquisition
C.Completing the acquisition quickly
D.Thorough preacquisition screening
E.Postacquisition audit to review the process and discuss ways to improve it
Institutional investors are becoming more aggressive in exerting their power with the
board by
A.boycotting stockholder meetings.
B.pursuing leveraged buyouts.
C.selling their shares when they do not agree with company actions.
D.defining a company’s business for them.
E.pushing for more effective governance structures.
A matrix structure would be the most appropriate for which of the following firms?
A.A large multinational company with a distinctive competence in marketing
B.A company operating in the maturity stage of the industry life cycle
C.A medium-sized technological firm with an objective of fast product development
time
D.A company with a high level of vertical differentiation
E.A company pursuing a cost-leadership strategy
Which of the following has occurred in international trade over the past half-century?
A.There has been a dramatic increase in the barriers to international trade.
B.Tariff rates on manufactured goods traded by advanced nations have fallen.
C.Regulations prohibiting foreign companies from entering domestic markets and
establishing production facilities have increased.
D.The volume of world trade has decreased dramatically.
E.All of these.
Julian is asked to examine the demographic environment facing his employer, a
clothing manufacturer. Which of the following should Julian examine?
A.Government regulations
B.Inflation
C.Manufacturing technology
D.Aging of the population
E.Society’s growing interest in exercise