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Exam 1 and 2 Questions

What type of new strategic leader is the MOST likely to make drastic strategic changes?
a new strategic leader hired from outside the company
"Changes in organizations and interest groups that compete for a voice in developing and overseeing the body of laws and regulations that guide interactions among firms and nations" are known as
political/legal trends
Which of the following is most likely to help an organization expand its business into new markets?
external social capital
When few, if any, competitors can perform a value chain activity with the same level of quality, then that competence is said to be
The two dimensions of business level strategy are
competitive advantage and competitive scope.
Which of the following DOES NOT reflect an example of the impact a new entrant might have on an industry?
A new entrant might decrease competitive rivalry.
Imagine that you have been asked by firms in the airline industry to use the industrial organization (I/O) model to help them identify reasons for their current performance problems. Which of the following conclusions might you draw?
Answer was "All of These"
A company's "motivation to leverage its resources and capabilities to reach its vision" is known as
strategic intent
Which of the following statements concerning an entrepreneurial culture IS INCORRECT?
It cannot tolerate failure
A firm's intellectual property is developed by its
human capital
A top management team that is made up of people with very similar backgrounds and experience is considered to be
a homogeneous team
Conditions in the external environment that can prevent a company from reaching its vision are known as
What type of control system uses both financial and strategic controls simultaneously?
balanced scorecard control system
A high-priced women's leather goods maker uses an easily recognizable gold star-motif which ornaments the embossed leather used to make the products. This manufacturer has a policy of never having "sales" on its merchandise or selling its products through discount retailers. This company's products are easily recognizable by persons familiar with the brand. This company would be very careful to
monitor for counterfeit products.
According to the text, the final responsibility for effective strategic management lies with whom?
strategic leaders
To build social capital, effective strategic leaders have well-developed
relational skills.
Which of the following statements is true?
Diversified firms need multiple business- level strategies.
Individuals and groups who have an interest in how a firm performs and can influence a firm's actions are known as
In an organization using the differentiation strategy, which of the following functions is most likely to be more important than the others?
Which of the following represents a decision that strategic leaders must make when using the strategic management process?
"All of these."
When changes occur in the activities that help create new knowledge or in the activities that help transform new knowledge into new processes, products or materials - these changes are known as ____.
technological trends
When a supplier is able to increase the price of its product or reduce the quality of the product while maintaining the same price, that supplier possesses significant
bargaining power
The "one-time costs that customers incur when they decide to buy a product from a different supplier" are known as
switching costs
Dell Computer uses inbound logistics, operations, sales and distribution to directly create value for its customers, consequently these activities are all examples of
primary activities
Cisco Systems' CEO John Chambers analyzed the company's performance problems and decided to make fewer and more carefully planned acquisitions in order to improve performance. What type of control did Chambers' actions reflect?
strategic control
Which of the following IS NOT one of the basic areas that a company like Boeing should study in order to understand in which areas its competitor, Airbus is strong or weak?
organizational structure uses the Internet and telemarketing to sell its products to customers. This set of actions taken by after it selected its strategy is known as
strategy implementation
To promote more effective corporate governance, institutional investors generally prefer
more independent outside directors.
What is the primary reason that a firm should decide to outsource a value chain activity?
If the firm identifies serious inefficiencies in how it completes one or more activities, it should consider outsourcing.
Which of the following is the BEST example of a firm's investment in a "real option?"
A pharmaceutical company develops a variety of drugs in the hope that one of them might become a "blockbuster" that cures a life-threatening illness
In order to be successful, a company must create value that
exceeds the costs incurred to produce, distribute and service products for customers.
Which of the following resources are the most difficult to identify and evaluate?
intangible resources
In general, customers are satisfied when the firm's product
creates value for them.
Goods or services from outside the industry that perform functions that are similar to an existing product in a different industry are known as
substitute products
Which of the following IS NOT a potential barrier to entry?
Agency costs
Which type of top management team is likely to make the BEST decisions?
a heterogeneous top management team
Even though Coca-Cola's brand has iconic status with customers throughout the world, they continue to advertise for
Imagine that a US-based firm wants to begin selling its products in Mexico. Which of the following resources or capabilities are necessary for the firm to succeed in entering the Mexican market?
"All of these"
As industry growth slows
competitive rivalry increases
According to the resource-based view of the firm (RBV) model, what is the most likely source of competitive advantage for any firm?
Ability to use unique resources and capabilities to create value for customers.
"We're highly selective about what we sell, dedicated to stringent Quality Standards, and committed to sustainable agriculture". This is a good example of a:
Mission Statement
Whole Foods faces a threat from all of the following except:
Conventional produce
Whole Foods can avail all of the following opportunities except:
Increased inflation rate
A few of Whole Foods strengths are:
reputation, wide array of products, market reach, financial stability and trained and empowered employees.
What all may prevent rivals from imitating Zara's business strategy?
Zara's relationship with its suppliers, logistics system, established store locations, product offerings, and management expertise.
The organizational structure which provides the most flexibility in designing products and responding to customer needs is the ____ structure.
global matrix
Which of the following is not a characteristic of an entrepreneur?
focused on cost-benefit analyses.
An acquisition will ultimately succeed or fail on the basis of:
how well the target and acquiring firms integrate their operations.
A redesign of an automobile tire to make it more resistant to punctures would be a/an ____ innovation.
The most common reason for outsourcing is to reduce costs. Another major reason for outsourcing is to:
gain access to special skills for higher quality output
The main reason that an internal capital market would generate superior returns for shareholders as compared with external capital markets is:
the improved access to information about SBUs
Firms often form alliances with partners from previous alliances because
social capital already exists between them
There are opportunity costs to acquisitions because managers in the acquiring firm:
neglect other aspects of the firm's operations
If a firm has a strong set of innovation skills and capabilities, it should pursue entrepreneurial opportunities through
internal innovation
All of the following are advantages for both parties of strategic alliances for innovation except sharing
all core capabilities of each firm
The international strategy that attempts to combine global scale efficiencies with local responsiveness in a geographic region is the ____ strategy.
Northwest Airlines has been acquired by Delta. This is an example of a ____ acquisition.
If country-specific advantages for production are stronger in the home country, ____ is likely the best choice for entering an international market.
Visionary Optical Research has patented a new type of implantable lens for people with serious eye defects. It does not have access to the financial assets or marketing expertise to begin manufacturing and selling the lenses on a large scale.
VOR should form a strategic alliance with a firm with complementary resources.
Division managers in the ____ form of the M-form structure would have very little contact with one another and would have little or no motivation to form relationships across divisions.
Cost savings that the firm accrues when it successfully shares some of its resources and activities or some of its core competencies between its businesses are called:
economies of scope
In a fragmented market, firms can use an acquisition strategy to:
increase their growth rate.
Glorietta Manufacturing specializes in making luxury leather goods from exotic skins, such as snake, lizard, and alligator. In the last few years it has been increasingly difficult to obtain high quality, unblemished alligator skins. It's main source of alligator skins, Gator-Rama Ranch, has a number of other customers. So, Glorietta's management has decided to enter acquisition negotiations with Gator-Rama in order to gain control over Gator-Rama's output. This is an example of a:
vertical acquisition
A German firm that manufactures precision scientific instruments has built a new factory in Nebraska on property that it has leased. It has hired German scientists and engineers as well as German technicians to work at the plant. The firm received tax benefits and other economic incentives from Nebraska in order to build this new plant. This is an example of a/an:
greenfield venture
In the related-linked diversification strategy, strategic business units (SBUs):
share resources, activities, and core competencies only with the SBU.
Managerial motives to diversify their organizations include all except:
to reduce the challenge of managing the organization.
A manufacturer of kitchen and laundry appliances plans to produce and sell different varieties of appliances in various countries due to differences in kitchen and home sizes, electrical power variations, alternative fuels, and cultural preferences. This manufacturer will be following the ____ strategy.
The four basic questions of due diligence include all of the following except:
What are the target firm's motives for selling?
Hector is a research scientist in the field of optics at TransOptic, Inc. His employer is in the middle of a series of acquisitions of other firms noted for innovations in optics. These acquisitions are expensive, and other areas of the firm have experienced budget reductions.
Hector should be concerned, as excessive acquisitions often cause a firm to neglect internal R&D.
Wanda Williams, director of Human Resource for Pharmacy Partners, Inc., is concerned that the acquisition of a chain of regional drug stores is not going to be successful. She argues that:
the newly-formed organization needs to create a new identity.
Organizations pursue innovation because it:
is positively linked to improved firm performance
In an organization using the unrelated-diversification multiproduct strategy, if an SBU is performing poorly, it will either be disciplined by headquarters changing its resource allocation or it will be:
For the last 9 years, SISI Designs, has been the outstanding innovator in its field. Its top design team has worked together closely all this time and has resisted lucrative offers from other firms to join them. Megalith, Inc., wishes to gain SISI's elite design team and integrate them with its own designers. Megalith will probably have most success it if:
acquires SISI.
The main check on managerial desires to over-diversify the firm is/are the
board of directors
ZigZag, Inc., operates in four international locations: North America, Latin America, Western Europe, and Eastern Europe. For each of these locations, it has profit centers with separate functions such as accounting, marketing, finance, and information systems. ZigZag uses the ____ structure.
worldwide divisional
Valve-Tech manufactures valves for pipelines for the oil industry. The company has been in this business for the past 35 years, and focuses exclusively on valves. As a specialist in all variety of valves for oil pipelines, it is widely known and respected in the oil industry. Valve-Tech is an example of a ____ multiproduct strategy.
single business.
Which of the following is not one of the major common pitfalls of acquisition?
executives who are slow to make acquisition decisions.
The law firm of Smith, Jones, and Richards, LLC, has entered into an agreement to combine its operations on a relatively equal basis with Garcia, Lopez, and Romero, LLC, another law firm. This transaction is an example of a:
The island of Madagascar has large, undeveloped deposits of a rare mineral. A European mining company is interested in locating in Madagascar to extract this mineral. This is an example of an international strategy being motivated by:
sourcing of resources and supplies.
All of the following are examples of foreign direct investment except:
turnkey projects
Crested Eagle Enterprises uses the related linked multiproduct strategy. One of its businesses developed in-depth marketing knowledge of the Northwest region of the U.S. which has traditionally been a weak spot for Crested Eagle's businesses. This marketing knowledge is being transferred throughout Crested Eagle's businesses through a series of seminars and training courses. This is an example of:
corporate relatedness
If a firm generates excessive debt after an acquisition, credit rating agencies will reduce its credit rating. This reflects the fact that the firm:
is a riskier investment.
High uncertainty in competitive markets
encourages firms to form alliances to share risks.
For a fee, McDonald's provides trademarks, the operating system, and its well-known products as well as support services such as advertising, specialized training, and quality assurance programs to partners across the world. This type of market entry is called:
Along with differences in cultures, the major impediment to the transfer of knowledge or sharing of other resources between companies in an international strategic alliance is:
lack of trust
What incentives does CI have to using an international strategy?
Case Analysis Question
Increased market size, greater returns on investments in analytical processes, and competitive advantage through location.
What type of multi-product strategy has Jewell Inc. adopted?
Case Analysis Question
Related-linked strategy
You would describe the centralization of Jewell's operations as:
Case Analysis Question
Partially centralized in SBU's or divisions