STRATEGIC MANAGEMENT

STRATEGIC MANAGEMENT EX. 1

____ 1. Considering both GDP and population, what is the world's largest
single market?

a. Europe

b. The United States

c. China

d. Japan

 

 

____ 2. In the new competitive landscape, firms will attain competitive
success by:

a. continuing current corporate strategies.

b. meeting, or exceeding, global standards.

c. avoiding challenges that change their capabilities.

d. committing more resources to international products.

 

 

____ 3. Global competition has increased performance standards in many
dimensions. These dimensions include all EXCEPT:

a. production cost

b. quality of product

c. social responsibility

d. decreased production time

 

 

____ 4. The five forces model does NOT include which of the following?

a. Buyers

b. Competitive rivalry

c. Suppliers

d. Economic environment

 

 

____ 5. To have the potential to become sources of competitive
advantage, resources and capabilities must be valuable, __________, and
__________.

a. common, easy to imitate.

b. easy to imitate, difficult to implement.

c. rare, costly to imitate.

d. easy to implement, costly to imitate.

 

 

____ 6. The I/O model and the resource-based view of the firm suggest
conditions that firms should study in order to:

a. compete in domestic but not international markets.

b. examine strategic outputs achieved mainly in the last 5-year period.

c. engage in different sets of competitive dynamics.

d. develop the most effective strategy.

 

 

____ 7. Generally speaking, product market stakeholders are satisfied
when:

a. a firm's profit margin yields the lowest return to capital market
stakeholders that is acceptable to them.

b. a firm's profit margin yields an above-average return to its capital
market stakeholders.

c. the interests of the firm's organizational stakeholders have been
maximized.

d. a firm grounds its operations in the principles of the resource-based
view of the firm rather than the principles of the I/O model.

 

 

____ 8. Organizational stakeholders are usually satisfied when:

a. their return on investment has been maximized.

b. customers pay the highest sustainable price for the goods and
services they receive.

c. companies are willing to be longer-term employers.

d. companies are growing and helping employees develop their skills.

 

 

____ 9. Organizational culture is the:

a. appreciation for the arts in the organization.

b. ability of the organization to act in a responsible manner towards
all of its employees.

c. amount of the firm's social activity in the community.

d. complex set of ideologies, symbols, and core values shared by most
members of the organization.

 

 

____ 10. Smith Marketing Research, Inc., (SMR) which conducts mystery
shopping for retail firms, such as department stores and home
improvement stores in the Southwest. In order for Mr. Smith to predict
the success of expanding nationwide, he should:

a. examine the growth trend in profits for the firm over the last five
years and project that onto the national customer base.

b. consider whether the organizational culture is consistent with
expansion.

c. consult the major stakeholders of the company.

d. map the profit pool for the mystery shopping industry.

 

 

____ 11. PGG Mining is making a strategic decision whether to shut down
a coal mine in Pennsylvania. Its decision:

a. should be based solely on the results of profit pool mapping.

b. has ethical implications for organizational stakeholders.

c. is socially responsible only if the firm is making below-average
returns from the mine.

d. will be a violation of the firm's strategic mission.

 

 

____ 12. The __________ environment is composed of elements in the
broader society that can influence an industry and the firms within it.

a. general

b. competitor

c. sociocultural

d. industry

 

 

____ 13. The ethically questionable practice of placing "cookies" on
website customers' personal hard drives is an example of using the
Internet for __________.

a. assessing.

b. monitoring.

c. forecasting.

d. scanning.

 

 

____ 14. Analyzing income distribution would include all of the
following EXCEPT:

a. the purchasing power of different groups.

b. the discretionary income of different groups.

c. how much salary each group makes within a particular firm.

d. how income is distributed within populations.

 

 

____ 15. The sociocultural segment of an environmental analysis is
concerned with:

a. the economic condition of society.

b. social attitudes and cultural values within a society.

c. the political condition of the societies in which the firm does
business.

d. the technological condition of the society.

 

 

____ 16. An analysis of society's attitudes and values would be
conducted when studying the __________ segment of the general
environment.

a. sociocultural

b. global

c. demographic

d. economic

 

 

____ 17. An analyst considering the airline industry would likely
conclude:

a. customers are relatively weak because of the high switching costs.

b. the industry is ripe for mass customization.

c. the competitive rivalry in the industry is severe.

d. the industry suppliers are motivated to integrate forward.

 

 

____ 18. JetBlue has contradicted the general opinion that:

a. barriers to entry in the airline industry are too high to allow new
competitors to be successful.

b. switching costs are too high for a new competitor to be successful.

c. product/service substitutes are not viable in the airline industry.

d. the high strategic stakes of international competitors would be too
fierce to allow success for a new U.S. entrant.

 

 

____ 19. As customers come to believe that a firm's product is unique,
this allows the firm to:

a. decrease its advertising expenditures.

b. customize its product.

c. force other companies out of the market by lowering prices.

d. obtain loyal customers.

 

 

____ 20. Switching costs refer to the:

a. cost to a producer to exchange equipment in a facility when new
technologies emerge.

b. cost of changing the firm's strategic group.

c. one-time costs suppliers incur when selling to a different customer.

d. one-time costs customers incur when buying from a different supplier.

 

 

____ 21. A certain marble quarry provides a unique type of marble that
is richly colored and strikingly veined. It has been used for churches
and public buildings throughout the world. The architect of a new
headquarters for a prestigious Fortune 500 firm has specified the use of
this marble, and this marble only, for this project. Which of the
following statements is most likely to be true?

a. The cost of the marble will be expensive because of the bargaining
power of the supplier.

b. The cost of the marble will be moderate because of the bargaining
power of the buyer.

c. The cost of the marble will be moderate because of economies of
scale.

d. The cost of the marble will be expensive because of the high
strategic stakes involved.

 

 

____ 22. If lawn tractor manufacturers have created excess capacity,
they are likely to:

a. raise prices on new lawn tractors.

b. be vulnerable to new entrants to an attractive market.

c. be responding to intense rivalry from international manufacturers.

d. offer rebates and incentives on new lawn tractors.

 

 

____ 23. When rivalrous firms compete aggressively by trying to attract
competitors' customers, this might be an indication of:

a. an industry with low exit barriers.

b. increasing economies of scale.

c. slow industry growth.

d. high bargaining power among buyers.

 

 

____ 24. A company that is committed to gaining market share in a
certain industry:

a. is likely to raise the level of competitive rivalry in the industry.

b. probably has top management that is affected by emotional barriers to
exit.

c. has decided that long-run above-average returns are not important.

d. usually embarks on an acquisition strategy.

 

 

____ 25. Exit barriers to a firm include:

a. non-specialized assets.

b. loyalty to employees.

c. governmental concern about job loss.

d. restrictive labor agreements.

 

 

____ 26. Competitor intelligence could ethically come from all the
following EXCEPT:

a. court records.

b. financial reports.

c. trade show discussions.

d. eavesdropping.

 

 

____ 27. Which of the following intelligence gathering techniques is
legal?

a. buying a competitor's confidential documents

b. trespassing in a competitor's production plant

c. eavesdropping on competitor's conversations

d. listening to trade show presentations given by a competitor's
employees

 

 

____ 28. Internal analysis enables a firm to determine what the firm:

a. can do.

b. should do.

c. will do.

d. has done.

 

 

____ 29. __________ is measured by a product's performance
characteristics and its attributes for which customers are willing to
pay.

a. competitive advantage

b. total quality

c. contribution

d. value

 

 

____ 30. __________ of organizational decisions fail.

a. 10%

b. 25%

c. 50%

d. 75%

 

 

____ 31. The condition of uncertainty in managerial decision-making
occurs when:

a. the firm's fundamental core competencies are incompatible.

b. a wide range of internal issues must be examined.

c. there are rapid changes in technologies, economic and political
trends, and societal values.

d. managers are unable to determine the best course of action to take.

 

 

____ 32. Competitive advantage typically comes from:

a. individual resources.

b. one unique resource.

c. several outstanding resources acting independently.

d. the unique bundling of several resources.

 

 

____ 33. The firm's reputation for quality is:

a. an example of a tangible resource.

b. not an issue of principal concern for a firm.

c. an example of an intangible resource that can provide a competitive
advantage.

d. a resource for the firm on which funds can easily be borrowed.

 

 

____ 34. The knowledge possessed by a firm's human capital is:

a. easily reproduced by competitor firms which allows them to obtain a
competitive advantage.

b. a significant organizational capability and may be the root of all
competitive advantage.

c. not a primary source of competitive advantage.

d. centered in a firm's top management team.

 

 

____ 35. __________ is an example of a capability that is based in the
functional area of distribution.

a. Effective use of logistics management techniques

b. Effective control of inventories through point-of-purchase data
collection

c. Effective organizational structure

d. Product and design quality

 

 

____ 36. Costly-to-imitate capabilities can emerge for all of the
following reasons EXCEPT:

a. scientific transference.

b. social complexity

c. historical conditions

d. causal ambiguity

 

 

____ 37. A firm's inability to understand how a competitor uses its
capabilities to gain competitive advantage is an example of:

a. social complexity.

b. causal ambiguity.

c. the rarity of a capability.

d. the nonsubstitutability of a capability.

 

 

____ 38. In what way did Federal Express reconfigure the value chain
that has resulted in changing the nature of the delivery business?

a. decreased its technological development activity

b. changed from an informal to a formal firm infrastructure

c. reconfigured its outbound logistics and human resource management

d. changed its procurement policies and procedures

 

 

____ 39. A major reason outsourcing is being used is that:

a. it allows top managers to focus on operational details.

b. few firms possess superior capability in all primary and support
activities.

c. it permits unlimited access to capital resources.

d. competitors do not have access to the same external sources.

 

 

____ 40. What causes core capabilities to become core rigidities?

a. Changes in the external and internal environment

b. Inertia and competition

c. Strategic myopia and managerial inflexibility

d. Lack of knowledge and poor use of assets