To be successful in a growth industry, it is important to remain focused on the needs of
the early adopters of the new product.
When a company licenses its technology it can quickly lose control over it.
An approach to internal new venturing that has been championed by those who believe
that the best way to encourage new-product development is to integrate this effort into
the rest of the organization is the creation of a new-venture division.
One problem with a mishandled merger is that skilled managers who feel they have
been demoted will work together to sabotage the organization.
Absorptive capacity refers to the ability of an enterprise to identify, value, assimilate,
and use new knowledge.
A firm obtains competitive advantage when its strategy results in superior performance
relative to its competitors.
A vital source of information about the causes of poor quality are the firm’s own
employees.
Agency theory offers a way of understanding why managers do not always act in the
best interests of stakeholders.
SWOT analysis is implemented to fine-tune strategies.
Vertical integration is a less expensive strategy to manage than is unrelated
diversification.
In the embryonic stage of the industry life cycle, a company’s investment needs are low
because the market is generally quite small.
A diversification strategy based on resource sharing
A.entails a company creating value by applying the distinctive competencies it
developed in one line of business to another line of business.
B.requires the development of new business-level strategies.
C.can help a company to realize economies of scope.
D.is a valid way of supporting the generic business-level strategy of differentiation.
E.increases the accountability of units.
Scenario-based planning is a technique for coping with the problem of
A.uncertainty.
B.planning equilibrium.
C.bottom-up planning.
D.strategic fit.
E.cognitive bias.
Nick is often asked to perform his clown act for birthday parties and school groups, but
he offers his most inexpensive services only to children’s hospitals. Nick is pursuing
which generic business strategy?
A.Cost leadership
B.Differentiation
C.Focused cost leadership
D.Focused differentiation
E.Stuck in the middle
Common exit barriers include
A.investments in specific assets.
B.emotional attachments to an industry.
C.high fixed costs associated with leaving the industry.
D.bankruptcy regulations.
E.all of these.
Cost accountants are responsible for gathering and monitoring data used for controlling
the organization’s costs. Cost accountants work in which value chain activity?
A.Research and development
B.Human resources
C.Materials management
D.Marketing and sales
E.Company infrastructure
When a company has cash in excess of the amount needed to maintain a competitive
advantage in its core business, it will most likely pursue
A.taper integration.
B.full integration.
C.diversification.
D.long-term contracts.
E.strategic alliances.
In embryonic industries, customer demand is typically
A.high.
B.low.
C.growing rapidly.
D.variable.
E.slowly declining.
If a firm finds that its functional structure is becoming too awkward as the firm grows
in size and complexity, the firm can turn to
A.a simple structure.
B.downsizing.
C.reengineering.
D.restructuring.
E.outsourcing.
An industry’s buyers have high bargaining power when
A.buyers purchase in large quantities.
B.switching costs are low.
C.it is economically feasible for buyers to purchase inputs from several companies at
once.
D.buyers can threaten to enter an industry and produce the product themselves.
E.all of these.
The U.S. firm Intel, a maker of semiconductor chips, built twelve worldwide
manufacturing facilities in several different countries, but its research and development
(R&D) and marketing are centralized in the United States. Based on this information,
which strategy is Intel pursuing?
A.Localization
B.Transnational
C.International
D.Global standardization
E.Stuck in the middle
Which form of control would you be most likely to find in a voluntary or charity
organization?
A.Bureaucratic control through rules and procedures
B.Control through norms and values
C.Financial control through accurate financial statements
D.Output control
E.Incentive systems
The experience curve concept
A.is a result of a combination of learning effects and economies of scale.
B.is a result of a combination of learning effects and economies of scale and suggests
that unit manufacturing costs decline by a certain amount each time output is doubled.
C.suggests that achieving low costs allows a firm to charge a premium price.
D.is most important for specialized or customized production.
E.suggests that unit manufacturing costs decline by a certain amount each time output is
doubled.
Which of the following structures results in the creation of an office of corporate
headquarters staff?
A.Functional
B.Product team
C.Geographic
D.Matrix
E.Multidivisional
The philosophy underlying TQM includes which of the following?
A.Improved quality results in cost decreases.
B.Better quality leads to higher market share.
C.Better quality increases a company’s profitability.
D.Management should create an environment in which employees do not fear
expressing themselves.
E.All of these
Which of the following is not a responsibility of the board of directors?
A.Monitor corporate strategy decisions and ensure that they are consistent with
stockholder interests
B.Apply sanctions on management when appropriate
C.Hire, fire, and compensate the CEO
D.Develop the company’s competitive strategy
E.Make sure the audited financial statements present a true picture of the company’s
financial situation
Which of the following is not a main approach to market segmentation?
A.Marketing a product targeted toward average or typical customers
B.Marketing a product targeted toward most or all of the different market segments
C.Making customized products to meet the specific needs of customers
D.Making products to meet the specific needs of a narrow group of customers
E.Making one product aimed toward a general rather than a specific subset of
customers
A group of firms all make writing implements¾pens, pencils, and markers. This group
should be referred to as a(n)
A.substitute.
B.market segment.
C.sector.
D.supplier.
E.industry.
Research and development (R&D) can help a company improve quality by
A.designing products that are easy to manufacture.
B.pursuing economies of scale.
C.developing new products.
D.integrating R&D with marketing.
E.integrating R&D with materials management.
Disadvantages of a global strategy include
A.lack of local responsiveness.
B.inability to engage in global strategic coordination.
C.failure to exploit experience curve effects.
D.lack of control over quality.
E.inability to realize location economies.