The trend towards worldwide markets makes it easier to predict where competitors will
spring up.
First movers in an industry often capture above-average profits, but usually find it
difficult to maintain early market share gains.
Collaborating with innovation partners can provide missing resources necessary to
make innovation projects successful, such as the Coca-Cola and DEKA partnership to
produce the Slingshot water purification system.
Shared activities among businesses in a corporation do not always have a positive effect
on a differentiation strategy of a corporation.
A limitation of a multidomestic strategy is that it may lead to overadaptation as
conditions change.
Informational controls involve the balance and alignment of the culture, rewards, and
boundaries of a firm.
When considering the exporting decision, companies should consider that the ability to
tailor their products to meet local market needs typically is very limited.
According to the Gresham law of planning, operational decisions do not drive out the
time necessary for strategic thinking and reflection.
The three generic strategies presented by Michael Porter can be shown on two
dimensions: competitive advantage and product life cycle.
Incumbent firms that thought a niche market was too small to enter in the past may use
Internet technologies to enter that segment with focusers.
Once a knowledge asset (e.g., a software code) is developed and paid for, it can be used
many times at very low cost as long as it does not have to be substantially modified
each time.
In the current economy, reliance on the three traditional financial statements (income
statement, balance sheet, and statement of cash flow) has increased.
Competitor Intelligence (CI) is a tool that can provide management with early warnings
about both threats and opportunities.
Typically, joint ventures involve less control and risk than franchising.
In the __________ stage of the industry life cycle, there are many segments,
competition is very intense, and the emphasis on process design is high.
A. introduction
B. growth
C. maturity
D. decline
Firms must compete for top talent. When attracting and selecting employees, firms must
strive to select the best fit for both the employee and the firm. In an effort to reduce
wasted time and effort in interviewing too many candidates while assuring a good
candidate pool, a firm should ____.
A. run employment ads in the newspaper
B. only let lower level employees interview job candidates
C. use a pre-interview quiz
D. refrain from hiring by referrals from present employees
Functional benchmarking _____________.
A. is not very useful for organizations with a divisional organizational structure
B. endeavors to determine best practices regardless of industry
C. restricts the search for best practices to competitors
D. is useful when researching industry-specific standards
The vision and mission statements of a company set the overall direction of the
organization. Strategic objectives serve what role?
A. operationalize the mission statement
B. modify the mission statement
C. are a shorter version of the mission statement
D. are only clarified by the board of directors
Many companies use referrals by current employees as a source for new hiring and
even monetarily reward them because __________________.
A. it is less expensive than the fees paid to headhunters
B. current employees normally are careful in recommending someone due to their
personal credibility
C. it is a good test of employee loyalty
D. current employees are careful in their recommendations and it is less expensive than
the fees paid to headhunters
Product differentiation by incumbents act as an entry barrier because __________.
A. new entrants cannot differentiate their products
B. incumbents will take legal action if new entrants do not differentiate their products
C. new entrants will have to spend heavily to overcome existing customer loyalties
D. it helps a firm to derive greater economies of scale
In the 1990s, DuPont used its knowledge of plastics to develop biodegradable plastic
products. This is an example of _____________.
A. focusing on process rather than product innovation
B. defining its innovation efforts within the context of its strategic envelope
C. radical innovation
D. public relations, since plastics are not biodegradable
All of the following are the benefits of diversity in the workforce of a firm except:
A. creativity argument
B. problem-solving argument
C. similarity in perspectives argument
D. resource acquisition argument
Which of the following describes the most typical order of entry into foreign markets?
A. franchising, licensing, exporting, joint venture, and wholly owned subsidiary
B. exporting, licensing, franchising, joint venture, and wholly owned subsidiary
C. licensing, exporting, franchising, joint venture, and wholly owned subsidiary
D. exporting, franchising, licensing, joint venture, and wholly owned subsidiary
Convincing rivals not to enter a price war, protection from customer pressure to lower
prices, and the ability to better withstand cost increases from suppliers characterize
which type of competitive strategy?
A. differentiation
B. overall cost leadership
C. differentiation focus
D. cost leadership focus
The new entry strategy that a firm choses is dependent upon the ______________ and
the ______________ of the new business concept.
A. riskiness; cost
B. riskiness; potential sales
C. idea; innovativeness
D. riskiness; innovativeness
A firm is considering a large price cut on its leading product as a way to gain market
share. One executive strongly disagrees with the price cut. He observes that they are in
the same marketplace as their rivals and do not have any competitive advantages in
their cost structure. If they cut prices, their competitors will likely do the same. The end
result is that everyone will make less money. These arguments are an example of
________________.
A. a strategy of forbearance
B. a strategy of co-opetition
C. a hardball strategy whereby competitive actions are not undertaken without a clear
advantage
D. a weakness strategy that leads a company into constant decline
Social capital has downsides. Which of the following is a downside?
A. High social capital may breed groupthink, that is, a tendency to question shared
beliefs.
B. Socialization processes is inexpensive.
C. Individuals may become more willing to collaborate on joint projects.
D. Social capital may both breed groupthink and the socialization processes to create it
(orientation, training, etc.) can be expensive.
Which of the following is not a risk normally associated with Bottom of the Pyramid
strategies?
A. A low-end version of a brand may detract from the overall brand attractiveness.
B. The new low-cost products they develop may cannibalize the sales of their core
products.
C. Entrenched competitors can impact the ability of the new firm to enter the market
successfully.
D. New products may be perceived as exploiting the privileged customer with
substandard products.
Sharing core competencies is one of the primary potential advantages of diversification.
In order for diversification to be most successful, it is important that _____________.
A. the similarity required for sharing core competencies must be in the value chain, not
in the product
B. the products use similar distribution channels
C. the target market is the same, even if the products are very different
D. the methods of production are the same