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Management
Q:
Which of the following firms exhibits a cost leadership strategy?
a. Company As products meet customers needs in several niche markets.
b. Company B takes a low-volume high-margin approach in targeting customers for its products.
c. Company C targets customers who are willing to pay a premium price.
d. Company D targets the average customer.
Q:
Porters three generic choices address how a firm is to make strategic choices in order to:
a. Become an incumbent firm with excess capacity.
b. Allow buyers to enhance their bargaining power.
c. Strengthen the focal firms position relative to the five competitive forces.
d. Establish structures that increase the costs of entry and reduce the scale of production.
Q:
Porters three generic strategies are:
a. Industry-based view, resource-based view, and institution-based view.
b. Cost leadership, differentiation, and focus.
c. Rivalry among competitors, threat of potential entry, and threat of substitutes.
d. Potential profitability, assessment of opportunities, and challenge of threats.
Q:
Which is generally NOT true of differentiation?
a. Inability to pass on suppliers price increases to buyers.
b. Relentless efforts of competitors to duplicate differentiation.
c. Key areas of application include research and development, marketing/sales and after-sale services.
d. It is a challenge to identify attributes that are valued by customers in each market segment.
Q:
Which of the following are true concerning cost leadership?
a. Targets average customers for mass market little differentiation.
b. Key functional areas are manufacturing and materials management.
c. Relentless drive to cut costs might compromise value that customers desire.
d. All of the above.
Q:
Competitors that typically compete most vigorously with each other:
a. Are of different sizes and with similar market influence.
b. Have highly differentiated product offerings.
c. Offer big-ticket items to their market.
d. Are of similar size and offer similar products.
Q:
Which of the following is NOT one of the forces in Porters five forces framework?
a. The intensity of collaboration among rivals.
b. The threat of potential entry.
c. The bargaining power of buyers.
d. The threat of substitutes.
Q:
Maximizing opportunities and minimizing threats presented by the five forces provides some answers to which of the following questions?
a. Why do firms differ?
b. How do firms behave?
c. What determines the scope of the firm?
d. What determines the international success and failure of firms?
Q:
Porters five forces framework:
a. Identifies relevant variables but fails to ask the needed questions.
b. Identifies only questions to ask.
c. Identifies both relevant variables and questions to ask.
d. Eliminates the need for other frameworks to add insight about firm performance.
Q:
The luxury market is characterized by:
a. Fewer competitors than in a mass market.
b. Less use of incentives and price cuts to induce purchases.
c. Healthier profit margins than in a mass-market segment.
d. All of the above.
Q:
Which of the follow would tend to reduce the bargaining power of buyers?
a. Large number of buyers.
b. Products of the industry do not produce clear cost advantages or enhance the quality of life for buyers.
c. Purchase standard, undifferentiated commodity products from suppliers.
d. Willingness and ability of buyers to integrate backward.
Q:
Which of the following would tend to reduce the bargaining power of suppliers?
a. Dominance of the supplier industry by a few firms.
b. Suppliers provide unique, differentiated products with few or no substitutes.
c. Focal firm is not an important customer.
d. Unwillingness and inability of suppliers to integrate forward.
Q:
Which of the following are scale-based low cost advantages?
a. Experience curves.
b. Proprietary technology.
c. Favorable access to raw materials and distribution channels.
d. Favorable locations.
Q:
Which of the following tends to reduce the intensity of rivalry?
a. Similarity of firms in terms of size, market influence and product offerings.
b. Products are big-ticket items and purchased infrequently.
c. New capacity can be added in small increments.
d. Slow industry growth or decline in demand.
Q:
The relative bargaining power of the focal firm and (according to the traditional view) the degree of integration helps answer which of the following questions?
a. Why do firms differ?
b. How do firms behave?
c. What determines the scope of the firm?
d. What determines the international success and failure of firms?
Q:
Economist ________________ defined perfect competition as a situation in which price is set by the market, all firms are price takers, and entries and exits are relatively easy.
a. Michael Porter
b. John Maynard Keynes
c. Adam Smith
d. Richard Branson
Q:
Which of the following is true of the industrial organization (IO) economics model?
a. Industry structure determines firm performance, which determines strategy and conduct.
b. Original goal help regulators set policy to minimize the ability of firms to earn excess profits.
c. Strategists avoid the IO model to try to earn above-average returns (excess profits).
d. All of the above are true.
Q:
For a savvy strategist, the five forces framework provides for a strong beginning, middle, and end of strategic analysis.
a. True
b. False
Q:
In an industry-based view, firms should strive for integration and avoid outsourcing.
a. True
b. False
Q:
When demand is uncertain, integration increases strategic flexibility.
a. True
b. False
Q:
In an industry-based view, not every firm within an industry competes against each other.
a. True
b. False
Q:
Japanese firms do not tend to maintain close relationships with their suppliers.
a. True
b. False
Q:
Recent work favors outsourcing and willingness to collaborate with suppliers/buyers, as well as competitors.
a. True
b. False
Q:
The traditional view recommends avoidance of integration.
a. True
b. False
Q:
The industry-based view ignores the impact of industry history and institutions on firm performance.
a. True
b. False
Q:
Recent success of firms in unattractive industries suggests that firm-specific resources and capabilities are not needed to determine firm performance.
a. True
b. False
Q:
Strategies of firms within a strategic group tend to be differentand so does their performance.
a. True
b. False
Q:
The five forces model overemphasizes threats and downplays opportunities.
a. True
b. False
Q:
Strategic alliances are on the decline.
a. True
b. False
Q:
Telecommunications is an example of one industry in which one can determine exact boundaries.
a. True
b. False
Q:
An off-the-rack wedding dress would not be considered a highly differentiated product.
a. True
b. False
Q:
Once a firm becomes a cost leader, it no longer has to search as diligently for lower costs.
a. True
b. False
Q:
Cost leaders are significantly and negatively affected when strong suppliers decrease their prices.
a. True
b. False
Q:
Company Allgood is positions its products to target average customers for the mass market; Allgood is mostly likely the cost leader among market participants.
a. True
b. False
Q:
If a low-cost firm has already achieved the maximum efficient scale, it must turn to differentiation to distinguish itself from competitors.
a. True
b. False
Q:
Choosing whether to perform activities differently than rivals or to perform different activities than competitors is the essence of the Three Generic Strategies.
a. True
b. False
Q:
A focused firm avoids being either a specialized differentiator or a specialized cost leader.
a. True
b. False
Q:
The three generic strategies can strengthen a focal firms position relative to the five forces.
a. True
b. False
Q:
One of the benefits of having a cost advantage is that it serves as barrier to entry.
a. True
b. False
Q:
The three generic strategies include cost leadership, differentiation, and profitability.
a. True
b. False
Q:
By finding ways to reduce the per-unit cost of its products, a firm enjoys non-scale-based advantages that provide greater profitability.
a. True
b. False
Q:
Intel held numerous patents for semiconductors, allowing them to hold a significant share of the worlds market. These patents represented a significant barrier to entry for other firms wanting to enter the lucrative semiconductor business.
a. True
b. False
Q:
It is easier to establish dominance and market share in an industry that provides big-ticket items.
a. True
b. False
Q:
In order for firms within an industry to be more likely to enjoy higher profitability, product differentiation should be high.
a. True
b. False
Q:
If there are many sellers but only a few buyers, the sellers tend to have the most bargaining power.
a. True
b. False
Q:
If there are many buyers but only a few sellers, the buyers tend to have the most bargaining power.
a. True
b. False
Q:
Core features of the five forces model remain remarkably insightful when analyzing old industries but not new phenomena, such as e-commerce.
a. True
b. False
Q:
The threat of substitutes (products from different industries that satisfy customer needs being met by focal firms) is greater if there are low switching costs.
a. True
b. False
Q:
Substantial switching costs reduce the threat of potential entry.
a. True
b. False
Q:
Product proliferation is a potential strategy used to reduce the threat of potential entry.
a. True
b. False
Q:
High exit costs from an industry tend to reduce the intensity of rivalry.
a. True
b. False
Q:
A key indicator of intense rivalry among firms is low cost competitive actions and reactions.
a. True
b. False
Q:
A key proposition of the five forces framework is that industry structure is unrelated to firm performance and the strength of the five forces.
a. True
b. False
Q:
The primary contribution of IO economics is the structure-conduct-performance model.
a. True
b. False
Q:
Industrial organization economics is a branch of economics that seeks to better understand how firms within an industry may be both centralized and regulated.
a. True
b. False
Q:
An industry is defined as a group of firms producing goods and/or services that are similar to each other.
a. True
b. False
Q:
Mass markets tend to be characterized by low profit margins.
a. True
b. False
Q:
As you examine the current political, social, and economic environment of your country and the world as of the moment you are reading the text, what is your estimate of the extent to which globalization will increase or decrease in the short run? In the long run?
Q:
Who are the main opponents of globalization and what arguments do they make?
Q:
How is semiglobalization different from globalization and localization?
Q:
Why is there a backlash against globalization, and how do aspects of that backlash actually enhance globalization?
Q:
Describe the way in which a firm might use a balanced scorecard.
Q:
Having valuable, unique, and hard-to-imitate capabilities may be advantageous in doing business globally. However, what is the problem with trying to maintain that advantage?
Q:
Describe how strategy is not a rulebook but rather a theory. What advantages does strategy as theory have?
Q:
The text points out that not all firms should go global. In view of the vast opportunities, why should some firms not pursue international business?
Q:
Describe Liddell Harts strategy as action concept. Explain Mintzbergs theory about strategy and how it is similar to Harts.
Q:
How can principles of military strategy be useful in developing a global business strategy? Explain by using SWOT analysis.
Q:
What is the difference between developed economies and emerging economies? Give examples of countries that would be consider to have developed economies and those that have emerging economies.
Q:
When looking at globalization, many executives, policymakers, and scholars:
a. Consistently side with nongovernmental organizations in opposing globalization.
b. See more costs than benefits in globalization as it exists today.
c. Fail to take into sufficient account the social, political, and environmental costs associated with globalization.
d. Recognize that most other members of society share the same view of globalization.
Q:
The values and beliefs about globalization held by the general public are:
a. Nearly identical to those held by executives, policymakers, and scholars.
b. Nearly identical to those held by current business school students, but different from those of executives, policymakers, and scholars.
c. Much more positive than those held by executives, policymakers, and scholars.
d. More negative than those held by current business school students.
Q:
Viewing each country as a unique market and therefore somewhat isolated is known as _________, whereas ___________ sees market integration as subject to some barriers that do not totally insulate those markets.
a. antiglobalization; localization
b. localization; globalization
c. globalization; semiglobalization
d. localization; semiglobalization
Q:
For those who view globalization as a pendulum, the practice of _________________ to identify and assess as well as minimize the effects of unfortunate events is important.
a. risk management
b. strategy as action
c. intended strategy
d. SWOT analysis
Q:
The current era of globalization originated in the aftermath of:
a. World War I.
b. World War II.
c. The Vietnam Conflict.
d. The Gulf War.
Q:
Which of the following was the first to express concern about international competition from low-cost countries?
a. American political leaders in the twenty first century.
b. Union leaders in the last half of the twentieth century.
c. A first-century Roman emperor.
d. The King of England in the late 1700s.
Q:
Globalization is viewed as:
a. A new force sweeping through the world in recent times.
b. A long-run historical evolution since the dawn of human history.
c. A pendulum that swings from one extreme to another from time to time.
d. All of the above.
Q:
Global strategy refers to:
a. A particular theory on how to compete.
b. Offering standardized products and services on a worldwide basis.
c. Strategy of firms around the globeessentially various firms theories about how to compete successfully.
d. All of the above.
Q:
In determining the success and failure of firms around the globe, strategic managers will look at :
a. How to acquire, leverage, and sustain competitive advantage over time.
b. A comparative analysis of industry-based, resource-based, and institution-based practices.
c. How to best standardize a firms products and services on a worldwide basis.
d. A standardized balanced scorecard across industries.
Q:
A resource-based view of strategy sees a firms success as primarily dependent on:
a. A firms opportunities and threats.
b. A firms strengths and weaknesses.
c. The competitive forces of the firms market.
d. The formal and informal rules of the game.
Q:
When reviewing the diversity of management practices around the world, the quality of management practices:
a. Depends on the interpersonal relationships among managers.
b. Is tightly related to size of firm, economic development of markets, and formal structures.
c. Seems to correlate with the level of economic development.
d. Relies heavily the assessment of external opportunities and threats.
Q:
Part of Chinas economic growth has been attributed to guanxi, which is:
a. A process of rapid acquisition and divestment.
b. Formal institutional structures.
c. The nouveau riche of China.
d. Interpersonal networks and relationships.