Unlike fast-cycle markets, the struggle for market share in standard-cycle markets is
moderate.
a. True
b. False
An entrepreneurial mind-set, cross-functional product development teams, and shared
values/leadership are the three ways that firms implement internal innovations.
a. True
b. False
Toyota heavily uses a strategic network of vertical relationships. Toyota enables
engineers in supplier firms to communicate easily with companies with which Toyota
has contracts for services. This results in the suppliers and Toyota (the strategic center
firm) being more
a. interdependent.
b. competitive with one another.
c. creative.
d. complementary.
The fact that the prices consumers pay for branded breakfast cereals are above the
prices that would exist if there were true competition suggests that the cereal
manufacturers are engaging in
a. excessive cooperation.
b. joint ventures.
c. tacit collusion.
d. horizontal strategic alliances.
The key to achieving competitiveness, earning above-average returns, and remaining
ahead of competitors in the long run is to manage current core competencies
a. in a way that uniquely bundles and leverages the firm’s existing resources.
b. while simultaneously developing new ones.
c. and imitate the core competencies of successful competitors.
d. in order to preserve and enhance them against the firm’s competitors.
High levels of formalization of rules and procedures which often emanate from the
centralized staff are a characteristic of the structure used to implement the cost
leadership strategy.
a. True
b. False
A CEO may gain power by holding the titles of both CEO and Chairman of the Board.
a. True
b. False
The BEST multidivisional structure to use
a. is the competitive form.
b. is the SBU form.
c. is the cooperative form.
d. depends on the degree of diversification.
CaseScenario3:Bunnywac.
Bunnywac is a global producer and seller of batteries for consumer electronics, and
competes primarily by providing battery products equal in performance at a lower price.
The worldwide battery industry suffers from issues of overcapacity and
commoditization, brand segmentation and proliferation, the growing strength of global
retailers, and the low-cost threat of new entrants from Asia. Bunnywac has grown
quickly into one of the leading players in the battery industry primary through
horizontal acquisitions, and is now counted among the top four companies in North and
Latin America. Its presence in Europe and Latin America is negligible. A key factor in
Bunnywac’s rapid growth is its technology outsourcing arrangement with Mats. Mats is
one of Japan’s largest technology holding companies and Bunnywac’s core battery
technology is licensed from Mats. Bunnywac’s license with Mats expires soon and it is
concerned that Mats will not renew it, or will renew it only for a substantial price
premium. Consequently, Bunnywac’s CEO is exploring the possibility of developing its
core technology in-house.
Does Bunnywac’s development of its core battery technology better fit the notion of
autonomous or induced strategic behavior?
The larger the resources of a firm taking a competitive action compared with the
resources of the other firms in the industry, the the response will be of these other firms.
a. more fragmented
b. slower
c. larger
d. more tactical
The use of strategic alliances
a. is unlikely to yield success if partnering firms are headquartered in the same country.
b. may be too restrictive to facilitate entry into new markets.
c. usually increases the investment necessary to introduce new products.
d. is more frequent than other types of cooperative strategies.
The culmination of the strategic management process is
a. performance.
b. strategy implementation.
c. strategy formulation.
d. analysis.
An investor is considering in which of two start-up companies to invest. The investor
has faith in the industrial organization model of above-average returns and is using its
concepts to make a decision. Both start-up companies propose to manufacture
health-focused foods with such characteristics as low salt, low sugar, high fiber, and no
artificial additives. RexRich Foods has a business strategy of producing a differentiated
product for which consumers will pay more. Green Pastures Foods is in the
health-foods industry because of its internal culture and commitment to healthful
lifestyles. Which firm will the investor feel is most consistent with the model of
industrial organization?
a. Green Pastures Foods
b. RexRich Foods
c. Both firms are consistent with the I/O approach.
d. At the entrepreneurial stage, the model which companies follow is not important.
Several months ago, a restaurant developed a new appetizer that is a hit with customers.
Many customers go to the restaurant just for the appetizer, and it was at the center of a
recent highly positive review by a food critic. Preparation involves common ingredients
and average culinary skills but requires a very high oven temperature, which
significantly increases utility costs. Several competing restaurants have since added
their own version of the appetizer to their menu. Which criterion for assessing
capabilities/core competencies is met?
a. The restaurant has the capability to develop something that is valuable.
b. The restaurant has the capability to develop something that is rare.
c. The restaurant has the capability to develop something that is costly to imitate.
d. All of these criteria are met.
A large domestic market can provide the country’s industries a chance at dominating the
world market because a. they have been able to develop economies of scale at home.
b. they have access to abundant and inexpensive factors of production.
c. the related and supporting industries will have been developed.
d. the nation’s culture and educational system will be adapted to producing the labor
force needed for the industry.
Which of the following is NOT a benefit to the firm using the internal labor market to
select a new CEO?
a. Internal hiring results in an increased level of innovation.
b. Insiders are familiar with the firm’s products, markets, technologies, and operating
procedures.
c. Use of the internal labor market reduces turnover among existing employees.
d. Insiders are more familiar with a firm’s operating procedures.
Firms seeking to create value through corporate relatedness use the related constrained
strategy.
a. True
b. False
An advantage of using horizontal, vertical, or related acquisitions is that they are not
subject to regulatory review.
a. True
b. False
Firms using the related constrained strategy share activities in order to create value.
a. True
b. False