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Exam 2 Quizzes
Terms in this set (40)
Bonobos's Guideshop store concept allows men to have a personalized shopping experience, where they can try on clothing in any size or color, and then have it delivered the next day to their home or office. This fashion retail concept is most representative of...
an offensive strategy to seek uncharted waters and compete in blue oceans.
Strategic offensives should, as a general rule, be based on:
exploiting a company's strongest competitive assets—its most valuable resources and capabilities.
A vertical integration strategy can expand the firm's range of activities:
backward into sources of supply and/or forward toward end users.
Outsourcing strategies can offer such advantages as:
obtaining higher quality and/or cheaper components or services, improving a company's ability to innovate, and reducing its risk exposure.
What might not be considered as a strategically beneficial reason why a company may enter into strategic partnerships or cooperative arrangements with key suppliers, distributors, or makers of complementary products?
to enable greater opportunities for employee advancement
Imagine you are the CEO of a regional ride-sharing company considering diversification into meal delivery services. How would you determine whether or not your diversification strategy would be successful?
Diversification would result in enhanced shareholder value.
To test whether a particular diversification move has good prospects for creating added shareholder value, corporate strategists should use the:
attractiveness test, the cost of entry test, and the better-off test.
Which of the following rationales for pursuing unrelated diversification is likely to increase shareholder value?
to restructure an underperforming business
A company can best accomplish diversification into new industries by:
acquiring a company already operating in the target industry, creating a new business from scratch, or forming a joint venture with one or more companies to enter the target industry.
Generally, an acquirer overpays for a target firm when making an acquisition.
The VRIN analysis should not be used to examine a firm's products.
Imagine you own a tech firm located in the heart of Silicon Valley, you inherited the business from your grandparents who bought property in the area before the price of real estate skyrocketed in the area. Your location gives you a cost advantage over your competitors located across the country, as you have easy access to the top computer science grads, providers of growth capital, and patent lawyers who live in the area. Which isolating mechanism is protecting your location based resource from being imitated?
Which of the following is not a primary activity?
When comparing 2 firms, the firm with the higher ROE is always in a stronger financial position.
In which of the following industries would a broad low-cost strategy be most likely to be successful.
Aluminum can manufacturing
One avenue of differentiation is incorporating product attributes and user features that lower the buyer's overall costs of using the firm's product.
Which of the following companies best represent the use of a focus based strategy?
Which of the following sources of differentiation would be most easily copied by rivals?
Which of the following companies best represent the use of a best-cost based strategy.
Target Department Stores
In the face of strong competition from Amazon, Walmart's 2016 acquisition of Jet. com was driven by a strategic objective, such as:
expanding its geographic coverage or extending its business into new product categories
A sound justification for unrelated diversification is that:
doing so can deliver enhanced shareholder value if an undervalued company can be purchased at a bargain price
A firm's competitive assets that determine its competitiveness and ability to succeed in the marketplace.
Resources and Capabilities
These are the three tests for judging whether a particular diversification move can create value for shareholders.
The attractiveness test, the cost of entry test, and the better-off test.
These strategies are designed to deter other players in the market from head-on competition with the focal firm.
The farming out of value chain activities presently performed in-house to outside specialists and strategic allies
Businesses that have dissimilar value chains and resource requirements with no competitively important cross-business commonalities at the value chain level.
This is the major difference between a broad strategy and a focused strategy.
the size of the buyer group to which a company is appealing
A generic strategy based on gaining cost advantages often through selling mostly standard products and increasing the scale of operation.
Broad Low-Cost Strategy
The four tests of a resource's competitive power.
The VRIN test, which asks if a resource is valuable, rare, inimitable, and nonsubstitutable.
This identifies and assesses a company's resource strengths and weaknesses and its external opportunities and threats.
A generic strategy that aims to deliver products and services geared toward a specific consumer base by providing upscale features that command premium prices.
Focused Product Differentiation
The two biggest factors that distinguish one competitive strategy from another.
Scope of target market and low-cost vs. differentiation
A generic strategy that aims to deliver products and services with upscale features at a reasonable price.
Best Cost Provider
Cost reductions that flow from operating in multiple related businesses.
Economies of Scope
Collaborative formal arrangements where two or more companies join forces and agree to work cooperatively toward some strategically relevant objective.
This is the only legitimate means for justifying diversification.
Enhance Shareholder Value
These extend a company's competitive scope within the same industry by expanding its operations across multiple segments or stages of the industry value chain.
Vertical Integration Strategies
This matrix is useful for helping decide which businesses should have high, average, and low priorities in deploying corporate resources.
Nine-cell industry attractiveness matrix
A strategy based on abandoning efforts to beat out competitors in existing markets and instead trying to invent a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.
Blue Ocean Strategy
An analytical approach useful in determining whether a company's prices and costs are comparable to the industry leader's.
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