Competitive advantage occurs when a firm has more resources than its competitors.
The more dissimilar the contexts across which its businesses compete, the harder it is to
manage a firm’s portfolio and to create value through economies of scope.
In relatively stable environments, synergies are typically conceived as functions of
static business-unit arenas and the formal structural links among them.
Product-market stakeholders include parties with whom the firm shares the industry,
including suppliers and customers.
Lean manufacturing allows firms to reduce the “road blocks and speed bumps” that get
in the way of their ability to quickly add value.
When multinationals have subsidiaries in geographically distant locations, costs and
risks increase due to information asymmetry.
Over time, a change in the basis of competitive advantage will cause advantage to shift
from firms favored by industry conditions to those with obsolete resources and
capabilities.
Rivalry is the intensity of competition within an industry.
Stable markets move at a much faster pace than dynamic markets.
Most institutional investors are active and aggressive investors.
A firm contemplating a second-mover strategy should consider the inimitability of its
new product.
The general responsibility of the board of directors is to ensure that executives are
acting in their own best interests.
Firms in human capital intensive industries must develop strategies to reduce turnover
and attrition rates.
Financial markets will recognize the existence of a parenting advantage when the
collective market value is less than the independent market value of a portfolio of
business units.
Various tax benefits may provide unique financial synergies.
Historically, deregulation has had a major impact on the volume of merger and
acquisition activity in certain industries.
Porter’s five-forces model identifies forces that determine the basic structure of an
industry.
Lean manufacturing helps to create an environment where people know what is
expected and perform their duties without having to be reminded.
Commoditization is the process by which industry wide sales depend more on price and
less on unique product features.
Alliances are more effective than multinational corporations in facilitating the flow of
knowledge across borders.
A system for translating vision and strategy into tangible performance measured by
criteria such as sales growth and customer retention is called a(n) ________.
A)objective
B)balanced scorecard
C)stakeholder analysis
D)goal analysis
Executive activities include interpersonal roles, informational roles, and ________.
A)decisional roles
B)strategic roles
C)communication roles
D)relationship roles
The internal perspective on competitive advantage is also known as which of the
following?
A.structural approach
B.industrial organization economics
C.resource-based view
D.dynamic perspective
Research on strategy in hypercompetitive environments is typically anchored in all of
the following except the ________.
A)systems theory
B)chaos theory
C)adaptation theory
D)complexity theory
Synergy is the degree to which a firm conducts business in more than one arena.
With the help of a five-forces analysis and the value chain, managers can assess all of
the following except ________.
A)the desirability of investment in one market versus another
B)the competitive consequences of foreign investment
C)the value-chain activities needed to located in various regions
D)the predicted market reaction to a newly gained competitive advantage
An unsuccessful attempt to integrate both low-cost and differentiation positions is
called ________.
A)integration
B)focusing
C)straddling
D)splitting
A ________ is a business that has a weak competitive position and is in a slow-growth
industry.
A)cash cow
B)dog
C)star
D)question mark
Focusing on the ________ component of the five elements of strategy is an effective
way to set milestones and time lines to manage the scale and pace of a new venture’s
growth.
A) differentiators
B) staging
C) arenas
D) economic logic
All of the following are points that must be kept in mind when considering an
acquisition except ________.
A)managers need to be clear about the economic logic
B)managers need to understand and promote managerialism
C)managers need to consider alternatives to the acquisition
D)managers need to know how to navigate hazards that may ruin the project
Which of the following statements is true concerning Germany’s supervisory board?
A) It is responsible for managing the enterprise.
B) It is similar to the U.S. board of directors.
C) It advises members of the management board.
D) Executives are not allowed to serve on the supervisory board.
Valuable and rare resources can provide competitive advantage only as long as they are
________.
A)exploitable
B)inimitable
C)unique
D)tangible
Vision and mission statements express all but which of the following?
A)fundamental purpose
B)values
C)organizational hierarchy
D)view of the future
There are several questions managers should ask themselves when analyzing the firm’s
external context. These questions include all but which of the following?
A)What are the macro environmental conditions?
B)What appear to be unstoppable trends?
C)What is the firm’s industry?
D)How can we streamline internal processes?
The tendency of managers to make decisions based on personal self-interest rather than
the best interests of shareholders is referred to as ________.
A)managerial self-interest
B)managerial selfishness
C)egoism
D)managerialism
Competitors who get to market later must settle for lower prices because ________.
A)technology has changed
B)there are fewer resources available
C)there are more customers
D)prices have fallen
Business-level and corporate-level strategies are least likely to share which of the
following elements?
A.focus on profit maximization
B.focus on cash flow maximization
C.breadth of focus
D.focus on quality and efficiency
All of the following are drivers for the differentiation strategic position except
________.
A)premium brand image
B)economies of scope
C)unique styling
D)convenient access
All of the following are elements of Porter’s original five-forces model except
________.
A)degree of rivalry
B)buyer power
C)complementors
D)threat of new entrants
Compare and contrast the roles of principal and agent in modern corporations.
What are the conditions under which first-mover advantages diminish and fast-follower
advantages increase?
According to the CAGE framework, what are the attributes responsible for creating
cultural, administrative, geographic, and economic distance?
What is the rationale behind a roll-up strategy?
What is the relationship between strategy formulation and strategy implementation?
What is the role of the board of directors in corporate governance?
What is a strategic alliance and what does it involve?
Discuss the dispersion of stock ownership.