A divestment strategy’s success is often dependent upon good timing.
Digital music downloads have high marginal costs.
At Adam’s bicycle repair shop, the primary value chain activity of production occurs
each time a customer’s bicycle is repaired.
Building capabilities in organizational design that allow a company to develop a
competitive advantage starts at the functional level.
The problem facing differentiators, such as L. L. Bean, is how to protect the
distinctiveness of their products from imitators who are constantly searching for ways
to steal away customers by offering similar products at lower prices.
Within the furniture market, Jacob and Edward are both consumers who want to buy
furniture for its looks rather than its functionality. Jacob and Edward are both members
of the same customer group.
Internal new ventures can generally be executed far more quickly than acquisitions.
When a firm implements a global strategy with a global product group structure; it will
be more responsive to the unique needs of each local country.
Functional strategies, because they occur at a low level in the firm, play only a small
role in organizational success.
The mission of a company lays out some desired future state and articulates what the
company would like to achieve.
In practice, the strategies of most organizations are probably a combination of the
intended and emergent strategies.
Sherree works at ABC Manufacturing where she is part of a seven member team. Her
team coordinates its own activities as well as makes their own hiring, training, work,
and reward decisions. Sherree is a member of a group referred to as an empowerment
team.
The “late majority” are typically reached through specialized distribution channels, and
products are often sold by word of mouth.
To increase shareholder value, managers must pursue strategies that increase revenue
and market share, whether the results are profitable or not.
A company can increase the probability of success of an internal venture by
constructing efficient scale manufacturing facilities ahead of demand.
Ford Motors developed the Explorer sports utility vehicle, the number 1 selling sports
utility vehicle in the United States, based on an extensive study of customer
preferences. Which value chain activity of Ford conducted those studies?
A.Research and development
B.Human resources
C.Materials management
D.Marketing and sales
E.Company infrastructure
Rivalry refers to
A.competition.
B.the intensity of competition among established companies within an industry.
C.a struggle among firms using price, product design, and advertising.
D.all of these.
E.none of these.
Which of the following statements concerning customer defection rates is incorrect?
A.Defection rates are determined by customer loyalty.
B.The longer a company holds on to a customer, the greater is the volume of
customer-generated unit sales and the lower is the average cost of each sale.
C.Lowering customer defection rates allows a company to achieve a lower cost
structure.
D.Research and development should address the issue of customer loyalty in product
development.
E.There is a positive relationship between the length of time that a customer stays with
the company and profit per customer.
Some researchers claim that the spread of new products is similar to a viral infection,
suggesting that
A.products that are too new can hurt you.
B.new products change and mutate as rapidly as a virus does.
C.only high-technology products can stop the diffusion.
D.lead adopters become “infected” or enthused with the new product and subsequently
infect others by telling them about it.
E.medical professionals are the first to hear of most new technologies.
An embryonic industry is one that
A.has not yet been thought of.
B.is just beginning to develop.
C.has sufficiently developed so that early industry leaders have already been identified.
D.has initial government backing because of its importance to the general populace.
E.none of these choices.
The principal driver(s) of shareholder value is (are)
A.profitability.
B.profit growth.
C.market share.
D.profitability and profit growth.
E.all of these choices.
PepsiCo bought many of its bottlers. Which entry mode is PepsiCo using to enter the
bottling industry?
A.Joint venture
B.Internal new venture
C.Acquisition
D.Divestiture
E.Merger
There are guidelines for turbine blades for jet engines. These guidelines define the exact
material and performance requirements of these engines and can be referred to as
A.format wars.
B.technical standards.
C.a technological paradigm shift.
D.a first-mover advantage.
E.razor and blade strategy.
Global economies of scale can be realized by
A.expansion of overseas sales.
B.better utilization of production facilities.
C.boosting bargaining power with suppliers.
D.increasing cost savings through learning effects.
E.all of these choices.
Poor commercialization of new products
A.is the result of inefficient manufacturing technology.
B.occurs when a company markets a product for which there is not enough demand.
C.occurs when a product is not well adapted to a customer’s needs.
D.is due to poor quality.
E.is the result of uncertainty.
Which of the following is not true regarding a company’s distinctive competencies?
A.They represent the unique strengths of the company.
B.They refer to company strengths that competitors cannot easily match or imitate.
C.They form the bedrock of a company’s strategy.
D.They can be based in any of the value creation functions of the company.
E.They are shared by many firms in an industry.
Industry dynamism refers to
A.the gradual erosion of a company’s customer base over time.
B.shifts in product profitability.
C.a rapidly changing industry environment.
D.increasing per-unit costs.
E.none of these.
Demand reaches total saturation in the ____ stage of the industry life cycle.
A.embryonic
B.growth
C.shakeout
D.maturity
E.decline
A horizontal merger is a
A.consolidation of small firms from disparate industries.
B.consolidation of suppliers in an effort to ensure availability of vital components.
C.merger of firms within the same industry.
D.conglomerate acquisition.
E.violation of antitrust regulations.
Yankee Candle Company offers customers candles that burn for 50-60 hours, much
longer than most department store candle brands. Therefore, customers are willing to
pay a higher price for these candles. Yankee Candle Company is utilizing which of the
following?
A.Cost leadership
B.Focused cost leadership
C.Market segmentation
D.Product differentiation
E.A strategic group
Which of the following is an example of a technical standard?
A.Typewriter keyboard
B.Dimensions of containers used to ship goods on trucks, railcars, and ships
C.The Universal Serial Bus (USB)
D.Communication between a PC and the Internet via a modem (TCP/IP)
E.All of these
Competitive advantage is based on
A.distinctive competencies.
B.economic forces external to a company.
C.lack of government regulations controlling a firm’s ability to make rapid adjustments
in response to its changing environment.
D.all of these choices
E.none of these choices.
Companies that successfully differentiate a product often charge ____ prices for them.
A.premium
B.exorbitant
C.below cost
D.average
E.none of these choices
Technological disruption
A.typically happens slowly.
B.is usually begun by the industry leaders.
C.affects mostly small niche markets.
D.causes firms to adopt a new business model.
E.is a problem primarily in embryonic industries.
An internal new venture is the most appropriate strategic choice when
A.an industry is mature.
B.the firm will enter on a small scale.
C.the firm has competencies that can be leveraged.
D.speed of entry is the most important consideration.
E.there is strong pressure for quick profitability.