A franchise generally expires after a few years, whereas a license is designed to last into
perpetuity.
Establishing a customer service hotline to handle customer complaints would be
considered a primary activity in value-chain analysis.
Strategic objectives should be measurable, specific, appropriate, and realistic, but not
constrained by time deadlines.
As firms grow, owner managers often need to hire functional specialists to handle the
increased information-processing burden.
Scenario planning is usually concerned with short-term forecasts.
Amazon Prime is an example of a difficult to imitate capability that gives it competitive
advantage over its rivals.
Market power refers to cost savings from leveraging core competencies or sharing
activities among the businesses in a corporation.
Trading blocs and free trade zones promote the rise of international expansion.
According to the text, for most of the 20th century, managerial efforts were directed
more toward the efficient allocation of labor and capital, which are the two traditional
factors of production.
One disadvantage of a functional structure is that differences in functional orientation
may impede organization coordination and communication.
Although general administration is often viewed only as overhead expense, it can
become a source of competitive advantage. Examples include all of the following
EXCEPT:
A. negotiating and maintaining ongoing relations with regulatory bodies
B. marketing expertise increasing the revenues of the firm and enabling it to enter new
markets
C. effective information systems contributing significantly to overall cost leadership
strategy for the firm
D. top management providing a key role in collaborating with important customers
Creating value within business units can happen when a firm tries to find and acquire
either poorly performing firms with unrealized potential or firms in industries on the
threshold of significant, positive change. This is action is known as ______.
A. parenting
B. leveraging core competencies
C. restructuring
D. sharing activities
Employees will be able to obtain a proportionately high level of profits they generate
(relative to the firm) if ___________.
A. suppliers are loyal to the firm
B. their expertise is firm-specific
C. the cost to the firm of replacing them is high
D. the firm’s resources are path dependent
Organizations generally tend to become internally focused when faced with
______________ and _____________.
A. resource scarcity; declining performance
B. internal pressures; improving performance
C. resource abundance; declining performance
D. external pressures; resource abundance
The process of identifying, selecting, and developing new venture opportunities is
known as _____________.
A. innovativeness
B. bootstrapping
C. opportunity recognition
D. brainstorming
It is generally argued that the takeover constraint deters management from
_____________.
A. engaging in opportunistic behavior
B. considering acquiring other companies
C. declaring dividends
D. increasing the level of borrowing of a firm
A competitive advantage based on inimitability can be sustained for at least some time
if it has the following characteristics:
A. psychographic uniqueness, path dependency, causal ambiguity, and substitutability
B. physical uniqueness, path dependency, causal ambiguity, and social complexity
C. rarity, path dependency, causal ambiguity, and social substitutability
D. geographic uniqueness, cause dependency, social ambiguity, and path complexity
If a company is considering optimizing the physical location for every activity in the
value chain, which of the following is not a possible strategic advantage for that
decision?
A. Performance enhancement
B. Cost reduction
C. Political risk reduction
D. Life-cycle enhancement
In the BCG Growth Share Matrix, the suggested strategy for Stars is to ________.
A. milk them to finance other businesses
B. invest large sums to gain a good market share
C. maintain position and after the market growth slows use the business to provide cash
flow
D. not invest in them and to shift cash flow to other businesses
Which of the following statements about skunkworks is false?
A. They are independent work units.
B. They are used to encourage creative thinking and brainstorming.
C. They refer to a specialized type of outside contractor that corporations use to develop
entrepreneurial ideas.
D. They help managers set aside their usual routines and practices.
Based on statistics reported in the text, which of the following statements is not true?
A. Firms that obtain venture-capital funding receive an average of over $1 million each.
B. Total investment in start-up firms averages about $80,000 in the first year of the
activity of the firm.
C. Among the 100 fastest-growing new businesses identified by Entrepreneur
magazine, 61 percent obtained start-up funding from personal savings.
D. Ninety percent of the companies financed with venture capital funds fail.
Which of the following firms would likely pose the least competitive threat?
A. a firm in the same industry and in the same strategic group
B. a firm that produces substitute goods to your product line
C. a competitor to your product where a high switching cost exists
D. a firm in the same industry and in the nearest strategic group looking to join your
group
Which of the following is NOT one of the three characteristics of entrepreneurial
leadership mentioned by the text?
A. vision
B. dedication and drive
C. commitment to excellence
D. clarifying job responsibilities
Which statement regarding competitive advantages is true?
A. With an overall cost leadership strategy, firms need not be concerned with parity on
differentiation.
B. If several competitors pursue similar differentiation tactics, they may all be
perceived as equals in the mind of the consumer.
C. In the long run, a business with one or more competitive advantages is probably
destined to earn normal profits.
D. Attaining multiple types of competitive advantage is a recipe for failure.
__________ involves ensuring proper strategic controls and organizational designs.
A. Corporate governance
B. Corporate-level strategy
C. Strategy implementation
D. Business-level strategy
Atlas Door created competitive advantage by reducing the time to receive and process
and order and through installing a just in time logistics operation. Which of the
following is not a reason for their favorable position relative to the five forces of
industry competition?
A. It exerted power over its customers.
B. It created high entry barriers for new entrants.
C. The integration of many value-chain activities in the firm provided causal ambiguity
and path dependency.
D. The product was easily imitable.
Seeking products or services that have been successful in one market and introducing
the same basic product or service in another segment of the market is referred to as
_____________.
A. imitative new entry
B. adaptive new entry
C. proactive new entry
D. pioneering new entry
When important decisions need to be made at WBG Construction, CEO Greg Burrill
asks all employees with relevant knowledge or a stake in the outcome for their
thoughts. This collaborative approach recently led to a decision that not only sold a
house but also inspired a new floor plan that appealed to a whole new segment of
buyers. This is an example of _____________.
A. hierarchical control
B. knowledge management
C. enabling heroes and drones
D. employee empowerment
The antitakeover tactic, _______, is when a firm offers to buy shares of their stock from
a company (or individual) planning to acquire their firm at a higher price than the
unfriendly company paid for it.
A. golden parachute
B. poison pill
C. greenmail
D. scorched earth
Entrepreneurial firms that pursue a low-cost leadership strategy use all of the following
to achieve lower costs except _____________.
A. cost-saving technology such as the Internet
B. simple organizational structures
C. rapid decision making
D. extensive investment in order to achieve economies of scale