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Q:
Organizational culture is:
a. amorphous and changeable.
b. not easily imitable.
c. so difficult to analyze that most firms should choose to ignore it.
d. typically fragile in the face of changes in the external environment.
Q:
Compared to intangible resources, tangible resources are ______ constrained because they are ______ to leverage.
a. less; easier
b. less; harder
c. more; harder
d. more; easier
Q:
Value chain activities include all of the following EXCEPT:
a. supply-chain management.
b. operations.
c. management information systems.
d. distribution.
Q:
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.
Q:
A product's value is created by each of the following EXCEPT:
a. high cost and highly differentiated features.
b. low cost.
c. highly differentiated features.
d. low cost and highly differentiated features.
Q:
Which of the following is NOT a component of internal analysis leading to competitive advantage?
a. Tangible and intangible resources
b. Analysis of supplier power
c. Capabilities
d. Core competencies
Q:
A veterinary practice has added a pet boarding and grooming facility. Most of the practice's competitors also provide these services. The veterinary practice is gaining competitive:
a. advantage.
b. parity.
c. disadvantage.
d. neutrality.
Q:
Value chain analysis is a tool used to:
a. analyze a firm's external environment for value-creating opportunities.
b. analyze a firm's value chain activities and support functions in isolation from its competitors' value chain.
c. understand the parts of the firm's operation that create value and those that do not.
d. identify the firm's core competencies in each of the primary activities of the firm.
Q:
To build social capital whereby resources such as knowledge are transferred across organizations requires ______ between the parties.
a. a contract
b. determination
c. confidence
d. trust
Q:
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.
Q:
A firm's core competencies, integrated with an understanding of the results of studying the conditions in the external environment, should:
a. guarantee profits.
b. lead to a first-mover advantage.
c. drive the selection of strategies.
d. increase the firm's market share.
Q:
Subscriptions to the New York Times have been decreasing as more customers receive their news through other media. At the same time, advertisers have shifted portions of their spending to other media. The NYT's managers are making decisions under:
a. certainty.
b. uncertainty.
c. intraorganizational conflict.
d. interorganizational conflict.
Q:
Which of the following is NOT an external event that reveals the "dark side" of core capabilities?
a. A new competitor figures out a better way to serve the firm's customers.
b. New technologies emerge and replace those used by the firm.
c. A firm changes its focus to a new core competence.
d. Political or social events shift the foundation of current core capabilities.
Q:
The critical executive skill of the current business age is the ability to:
a. manage technological innovation.
b. manage human intellect.
c. initiate change and overcome inertia.
d. coordinate tangible and intangible resources.
Q:
When firms lay off employees, they are:
a. treating employees as an intangible resource.
b. recognizing the reduced value of labor in the value chain.
c. eroding the organization's knowledge resources.
d. temporarily sacrificing a tangible asset that is easily replaced.
Q:
In the airline industry, frequent-flyer programs, ticket kiosks, and e-ticketing are all examples of capabilities that are ______ but no longer _____.
a. rare; valuable
b. valuable; rare
c. socially complex; rare
d. valuable; causally ambiguous
Q:
A food bank in Florida was struggling to serve its customers. It asked Walmart for help. Walmart sent a team of managers who reorganized storage and transportation. The food bank was able to increase the number of clients served by tenfold. Walmart shared its expertise in:
a. distribution.
b. human resources.
c. marketing.
d. manufacturing.
Q:
Judgment is the capacity for making a successful decision when:
a. there are multiple decision criteria.
b. no obviously correct model or rule is available.
c. cognitive biases create barriers to rationality.
d. there are contradictions between the firm's vision and its implemented strategy.
Q:
Compared to tangible resources, intangible resources are ______ and ______.
a. less visible; more difficult to copy.
b. less visible; less difficult to copy.
c. more visible; more difficult to copy.
d. more visible; less difficult to copy.
Q:
Charmed by Claire is a successful retail boutique that sells women's accessories. Claire, the owner/manager, knows that women have many options when buying jewelry. When customers enter her store they are greeted by name and given prompt, friendly attention. Customers return to the store because the service is excellent. Claire says the most important decision she makes is hiring the best staff because customer service is vital to her business. Customer service is:
a. a human resource.
b. an organizational resource.
c. a rare resource.
d. a core competency.
Q:
Gamma, Inc., has struggled for industry dominance with Ardent, Inc., its main competitor, for years. Gamma has gathered and analyzed large amounts of competitive intelligence about Ardent. It has observed as much of the firm's internal functioning and technology as it can legally, yet Gamma cannot understand why Ardent has a competitive advantage over it. The source of Ardent's success is
a. impregnable.
b. causally ambiguous.
c. rationally obscure.
d. elusive.
Q:
Firms that achieve competitive parity can expect to:
a. earn below-average returns.
b. earn average returns.
c. earn above-average returns.
d. initially earn above-average returns, declining to average returns.
Q:
In today's global economy, some resources that were traditionally critical to firms' efforts to sell goods are now less likely to be a source of competitive advantage.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
Q:
Although an organization's good reputation is a valuable resource that takes years of superior marketplace competence to achieve, it is not a good basis for building a competitive advantage because it can be destroyed almost instantly by bad publicity.
a. True
b. False
Q:
Two concerns about outsourcing are the potential loss of a firm's innovative ability and the loss of jobs within companies that decide to outsource some of their work.
a. True
b. False
Q:
Value chain activities in the value chain create value, whereas support functions generate costs.
a. True
b. False
Q:
A firm should outsource only activities where it cannot create value or where it is at a substantial disadvantage compared to competitors.
a. True
b. False
Q:
The need to meet quarterly earnings results causes managers to accurately examine the firm's internal organization.
a. True
b. False
Q:
Technology has made it more difficult for companies to find ways to develop competitive advantages.
a. True
b. False
Q:
Compared to tangible resources, intangible resources are an inferior source of core competencies.
a. True
b. False
Q:
The learning generated by making and correcting mistakes is generally unimportant to efforts to create new capabilities and core competencies.
a. True
b. False
Q:
A company can earn above-average returns only when the value it creates is less than the costs incurred to create that value.
a. True
b. False
Q:
The firm with the most capabilities wins.
a. True
b. False
Q:
Capabilities may be costly to imitate if firms have unique and valuable organizational cultures, are causally ambiguous, and socially complex.
a. True
b. False
Q:
Any core competency has the potential to lose its value-creating ability.
a. True
b. False
Q:
Walmart uses core competencies, such as information technology and distribution channels, to create value for its customers through its "everyday low prices."
a. True
b. False
Q:
Resources are the source of capabilities, some of which lead to the development of core competencies. In turn, some core competencies may lead to competitive advantage.
a. True
b. False
Q:
At Southwest Airlines, the complex interrelationship between its culture and human capital adds value for customers in ways that other airlines cannot, such as jokes on flights by flight attendants and cooperation between gate personnel and pilots.
a. True
b. False
Q:
Core competencies are capabilities that serve as a source of competitive advantage for a firm over its rivals.
a. True
b. False
Q:
"Motivating, empowering, and retaining employees" is an example of a capability that resides within the human resources functional area.
a. True
b. False
Q:
Creating customer value is the source of the firm's potential to earn above-average returns.
a. True
b. False
Q:
By themselves, resources can allow firms to create value for customers as the foundation for earning above-average returns.
a. True
b. False
Q:
Capabilities of an organization emerge spontaneously through the interaction of tangible and intangible resources.
a. True
b. False
Q:
Analyzing the internal environment enables a firm to determine what it can do by identifying resources, capabilities, and core competencies in the internal organization.
a. True
b. False
Q:
Firms should never outsource a primary activity because of the danger of the activity being imitated by rivals.
a. True
b. False
Q:
Valuable capabilities allow the firm to exploit strengths or neutralize weaknesses in the internal environment.
a. True
b. False
Q:
Interpersonal relationships, trust, friendships, and a firm's reputation are all examples of complex social phenomena that make capabilities easy to imitate.
a. True
b. False
Q:
Value is measured by the variable and fixed costs associated with the production and marketing of a particular product compared with the revenue and profits the product generates.
a. True
b. False
Q:
Describe the factors that raise the competitive nature of an industry's rivalry.
Q:
Identify the five forces that underlie the five forces model of competition. Explain briefly how they affect industry profit potential.
Q:
Explain why it is important for organizations to analyze and understand the external environment.
Q:
Describe the seven segments of the general environment.
Q:
Describe and discuss the four activities of the external environmental analysis process.
Q:
What are barriers to entry and how do they affect competition in the industry?
Q:
Identify and describe the three major parts of the external environment. What is the purpose for a firm to collect information about these aspects of its environment?
Q:
What is a firm's strategic group? What effect does the strategic group have on the firm?
Q:
What do firms need to know about their competitors? What legal and ethical intelligence-gathering techniques can be used to obtain this information?
Q:
What are high exit barriers and how do they affect the competition within an industry?
Q:
Competitor intelligence could ethically come from all of the following EXCEPT:
a. court records.
b. financial reports.
c. trade show discussions.
d. eavesdropping.
Q:
An industry is defined as:
a. a group of firms producing the same products or services.
b. firms producing items that sell through the same distribution channels.
c. firms that sell the same products or services to the same customer base.
d. a group of firms producing products that are close substitutes.
Q:
All of the following are aspects of the political/legal segment of the general environment EXCEPT:
a. lobby groups.
b. attitudes and values.
c. taxation laws.
d. industries chosen for deregulation.
Q:
All of the following are examples of efforts by firms to address the physical segment of the general environment, except the:
a. development of sustainable packaging by McDonald's.
b. reduction in carbon dioxide emissions by Procter & Gamble.
c. reduction in water usage in plants by Unilever.
d. increase in hiring of women and minorities at Microsoft.
Q:
The aircraft industry has long been dominated by two large aircraft manufacturers, Boeing and Airbus. The demand for major aircraft is low, and Boeing and Airbus aggressively compete for orders from airlines. What effect will these conditions have on the domestic airline industry?
a. It will make the airline industry more attractive because of decreased supplier power.
b. It will make the airline industry less attractive because of decreased supplier power.
c. It will make the airline industry more attractive because of increased supplier power.
d. It will make the airline industry more attractive because of a new entrant.
Q:
The ______ environment is composed of dimensions in the broader society that can influence an industry and the firms within it.
a. general
b. competitor
c. sociocultural
d. industry
Q:
All of the following are implications of strategic groups EXCEPT:
a. the strength of the five forces differs across strategic groups.
b. the strength of the five forces is the same across strategic groups.
c. competitive rivalry within strategic groups is greater than between strategic groups.
d. the closer the strategic groups are in terms of strategies, the greater is the likelihood of rivalry.
Q:
The large amount of advertising by firms such as Procter & Gamble and Colgate-Palmolive is an example of what kind of barrier to entry?
a. Access to distribution channels
b. Capital requirements
c. Economies of scale
d. Product differentiation
Q:
According to the five forces model, an attractive industry would have all of the following characteristics EXCEPT:
a. low barriers to entry.
b. suppliers and buyers with little bargaining power.
c. a moderate degree of rivalry among competitors.
d. few good product substitutes.
Q:
Applications developed for iPhones make the phone more valuable to iPhone users. App developers are ______ to Apple.
a. suppliers
b. customers
c. competitors
d. complementors
Q:
Characteristics of the current economic segment include all of the following EXCEPT:
a. general uncertainty.
b. a clear understanding of future economic opportunities and threats.
c. the inability of economists to provide valid and reliable predictions.
d. an expanding economy in Vietnam.
Q:
A general environmental analysis can be expected to produce all of the following EXCEPT:
a. objective answers.
b. recognition of environmental trends.
c. identification of organizational opportunities.
d. identification of organizational threats.
Q:
The three parts of the external environment that affect a firm's strategic actions are:
a. economic, political, and legal.
b. general, industry, and competitor.
c. industry, business, and product.
d. local, national, and global.
Q:
Economies of scale refers to the fact that as the:
a. quantity of product produced in a given time period increases, the cost of manufacturing each unit increases.
b. quantity of product produced in a given time period increases, the cost of manufacturing each unit remains constant.
c. quantity of product produced in a given time period increases, the cost of manufacturing each unit decreases.
d. quantity of product produced in a given time period decreases, the cost of manufacturing each unit decreases.
Q:
Mighty Green, a residential lawn chemical manufacturer, is committed to gaining market share in its industry. Mighty Green:
a. is likely to raise the level of competitive rivalry in the industry.
b. probably has top management who are affected by emotional barriers to exit.
c. has decided that long-run above-average returns are not important.
d. will probably embark on an acquisition strategy.
Q:
For a restaurant business dependent on drive-thru customers, the major cost disadvantage independent of scale would be if:
a. favorable locations are not available.
b. other competitors have proprietary product technology.
c. access to food and ingredients is difficult.
d. other competitors have government subsidies.
Q:
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
Q:
Green design, sustainable packaging, waste management, and energy efficiency are aspects of the ______ segment of the general environment that companies have sought to address with environmental sustainability initiatives.
a. technological
b. political/legal
c. global
d. physical
Q:
Golden Lotus, an exercise club targeting healthy individuals over 50, is located in a fast-growing city in the Southwest. Which of the following factors that may have an effect on the success of Golden Lotus is the most directly controllable by the company?
a. The sociocultural environment
b. The demographics of the environment
c. The economy of the local area
d. The power of the customers/buyers
Q:
An analysis of the economic segment of the external environment would include all of the following EXCEPT:
a. interest rates.
b. trade deficits or surpluses.
c. inflation rates.
d. income distribution.
Q:
When consumers change mobile phone and data service providers, they may be required to maintain service with the provider for a specified time period. This is an example of a:
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 cost suppliers incur when selling to a different customer.
d. one-time cost customers incur when buying from a different supplier.
Q:
Acme Valves, Inc., has been a successful player in the oil field supply industry in the last 15 years. Acme maintained its strategy and product characteristics over this time period. However, the company has experienced declines in sales and profits over the last four quarters. The CEO of Acme should
a. continue with the proven strategy because its returns over the long run are important.
b. focus on improving efficiency of production and cost control.
c. conduct an analysis of the external environment.
d. immediately begin making incremental adjustments to the traditional business strategy in an effort to improve sales.