question

The primary aim of strategic management at the business level is:

answer

achieving competitive advantage

question

Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize what generic strategy?

answer

overall cost leadership

question

Which of the following is an example of using a differentiation strategy to improve a firm's competitive position as defined by the five forces model?

answer

Lexus has enjoyed enhanced power over buyers because its top J. D. Power ranking makes buyers more willing to pay a premium price

question

Which of Porter's generic strategies should be used when directing attention toward narrow product lines, buyer segments or targeted geographic markets?

answer

focus

question

Two variants of the focus strategy rely on providing better service than broad-based competitors who are trying to serve the focuser target segment. What are they?

answer

cost and differentiation

question

A narrow market focus is to a differentiation-based strategy as a

answer

broadly-defined target market is to a cost leadership strategy

question

Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position vis à vis Porter's five forces?

answer

supplier power is increased because suppliers will be able to charge higher prices for their inputs

question

High product differentiation is generally accompanied by

answer

Decreased emphasis on competition based on price

question

Research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform ______________.

answer

higher than firms that achieve either a cost or a differentiation advantage

question

Primary value chain activities that involve the effective layout of receiving dock operations and support value chain activities that include expertise in process engineering characterize what generic strategy?

answer

overall cost leadership

question

A manufacturing business pursuing cost leadership will likely:

answer

rely on experience effects to raise efficiency

question

One aspect of using a cost leadership strategy is that experience effects may lead to lower costs. Experience effects are achieved by:

answer

repeating a process until a task becomes easier

question

Convincing rivals not to enter a price war, protection from customer pressure to lower prices, and the ability to better withstand cost increases from suppliers characterize which type of competitive strategy?

answer

overall cost leadership

question

Which of the following is a risk (or potential pitfall) of cost leadership?

answer

cost cutting may lead to the loss of desirable features

question

A firm can achieve differentiation through all of the following means EXCEPT:

answer

offering lower prices to frequent customers

question

Support value chain activities that involve excellent applications engineering support and facilities that promote a positive firm image characterize what generic strategy?

answer

differentiation

question

A differentiation strategy enables a business to address the five competitive forces by:

answer

lessening the competitive rivalry by distinguishing itself

question

potential pitfalls of a differentiation strategy

answer

uniqueness that is not valuable, too high a price premium, perceptions of differentiation may vary between buyers and sellers

question

All of the following are potential pitfalls of a differentiation strategy EXCEPT:

answer

All rivals share a common input or raw material

question

The text discusses 3 approaches to combining overall cost leadership and differentiation competitive advantages. These are:

answer

automated and flexible manufacturing systems, exploiting the profit pool concept for competitive advantage, coordinating the extended value chain by way of information and technology

question

The text discuss three approaches to combining overall cost leadership and differentiation competitive advantages. These are the following EXCEPT:

answer

Deriving benefits from highly focused and high technology markets

question

Which of the following phrases best completes this sentence: Because of the Internet, firms that use a focus strategy have new opportunities to:

answer

Assess niche markets in a highly specialized fashion

question

One of the primary advantages of diversification is sharing core competencies. In order for diversification to be most successful, it is important that

answer

the similarity required for sharing core competencies must be in the value chain, not in the product

question

Firms that diversify into related businesses realize primary benefits from________ relationships in which businesses share intangible and tangible resources.

answer

horizontal

question

A parenting advantage for a business new to the firm's portfolio can result from unrelated diversification due to which of the following?

answer

management expertise and support from the corporate office

question

Relates to the main means a company uses to make a profit. In essence, it is an interpretation of how a company has succeeded. It describes the cultural norms and beliefs that the company espouses.

answer

Dominant logic

question

Refers to situations in which firms meet the same rivals in many markets, which may lead to a reduction of competitive pressure.

answer

Multipoint competition

question

Corporate-level strategy addresses two related issues:

answer

what businesses to compete in; how these businesses can achieve synergy

question

McKesson, a large distribution company, sells many product lines such as pharmaceuticals and liquor through its superwarehouses. This is an example of

answer

achieving economies of scope through related diversification

question

When a sporting goods store with several locations acquires another retail store that carries different product lines, it is able to reuse many of its resources such as staff, managerial skills and favorable reputation in order to realize overall cost savings. In this case, the firm benefits from which of the following?

answer

economies of scope

question

Sharp Corporation specializes in optoelectronics technologies that are difficult to replicate, thus giving it competitive advantage over its rivals. These strategic resources are known as which of the following?

answer

core competencies

question

Sharing core competencies is one of the primary potential advantages of diversification. In order for diversification to be most successful, it is important that

answer

the similarity required for sharing core competencies must be in the value chain, not in the product

question

When management uses common production facilities or purchasing procedures to distribute different but related products, they are

answer

sharing activities

question

__________ reflect the collective learning in organizations such as how to coordinate production skills, integrate multiple streams of technologies, and market and merchandise diverse products and services.

answer

Core competencies

question

_________ is when a firm's corporate office helps subsidiaries make wise choices in their own acquisitions, divestures, and new ventures.

answer

Parenting

question

It may be advantageous to vertically integrate when

answer

lower transaction costs and improved coordination are vital and achievable through vertical integration

question

The risks of vertical integration include all of the following except

answer

lack of control over valuable assets

question

Unbalanced capacities that limit cost savings, difficulties in combining specializations, and reduced flexibility are disadvantages associated with

answer

vertical integration

question

A firm should consider vertical integration when

answer

the firm's suppliers of raw materials are often unable to maintain quality standards

question

Vertical integration is attractive when

answer

transaction costs are higher than internal administrative costs

question

Transaction costs include all of the following costs except

answer

agency costs

question

Transaction costs include all of the following:

answer

search costs, negotiating costs, monitoring costs

question

The process of identifying, selecting, and ___________ new venture opportunities is known as opportunity recognition.

answer

developing

question

According to the text, for an entrepreneurial start-up to be successful, three ingredients are critical. What are they?

answer

Aviable opportunity, available resources, and a qualified and motivated founding team

question

Young, small firms get start-up funding most frequently from which of the following?

answer

personal savings or contributions from family and friends

question

In recognizing opportunities, what two phases of activity are involved that lead to viable new venture opportunities?

answer

discovery and evaluation

question

What four qualities must an opportunity have for it to be viable?

answer

attractive, achievable, durable, and value creating

question

Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input into its manufacturing process. This is an example of

answer

vertical integration

question

For a core competence to be a viable basis for the corporation strengthening a new business unit, there are three requirements. Which one of the following is not one of these requirements?

answer

The new business must have an established large market share

question

Philip Morris bought Miller Brewing and used its marketing expertise to improve Miller's market share. This justification for diversification is best described as

answer

capitalizing on core competencies

question

Individual investors are dependent upon the corporation's managers to

answer

add value to their investments in a way that the stockholders could not accomplish on their own

question

The three primary means by which a firm can diversify are:

answer

mergers and acquisitions; joint ventures and strategic alliances; internal development

question

The downsides or limitations of mergers and acquisitions include all of the following except:

answer

it is a slow means to enter new markets and acquire skills and competences.

question

According to Michael Porter: "There's a tremendous allure to _______________. It's the big play, the dramatic gesture. With one stroke of the pen you can add billions to size, get a front page story, and create excitement in markets."

answer

mergers and acquisitions

question

Cooperative relationships such as _______ have the potential advantages such as entering new markets, reducing manufacturing (or other) costs in the value chain, and developing and diffusing new technologies.

answer

joint ventures and strategic alliances

question

A company offering local telecommunications service combines resources with an international company that manufactures digital switching equipment to research a new type of telecommunications technology. This is an example of

answer

strategic alliance

question

Divesting businesses can accomplish many different objectives, including

answer

all of these

question

__________ is when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant, positive change.

answer

Restructuring

question

All of the following are guidelines for managing strategic alliances EXCEPT

answer

relying primarily on a contract to make the joint venture work.

question

Which of the following statements regarding internal development as a means of diversification is FALSE?

answer

An advantage of internal development is that it is generally faster than other means of diversification and firms can benefit from speed in developing new products and services.

question

__________ may be time consuming and, therefore, firms may forfeit the benefits of speed that growth through __________ and __________ can provide. A. Strategic alliances; joint ventures; internal development B. Internal development; mergers; acquisitions C. Strategic alliances; mergers; joint ventures D. Mergers; internal development; strategic alliances

answer

Internal development; mergers; acquisitions

question

An antitakeover tactic called (a) __________ is when a firm offers to buy shares of their stock from a company (or individual) planning to acquire their firm at a higher price than the unfriendly company paid for it.

answer

greenmail

question

An antitakeover tactic in which existing shareholders have the option to buy additional shares of stock at a discount to the current market price is called

answer

a poison pill

question

The term "golden parachutes" refers to

answer

pay given to executives fired because of a takeover

question

Antitakeover tactics include all of the following EXCEPT

answer

golden handcuffs

question

A(n) ____________ is used by entrepreneurs who see products or business concepts that have been successful in one market niche and introduce the same product in another segment of the market.

answer

imitative new entry

question

Which of the following is NOT a common new entry strategy according to the text?

answer

proactive new entry

question

Which of the following is NOT one of the characteristics of an entrepreneurial opportunity?

answer

Affordable

question

Financing for entrepreneurial start-ups includes which of the following?

answer

Investments by family and friends, personal savings, private investors

question

According to the text, new ventures launched by entrepreneurial teams are more likely to be successful than ventures launched by

answer

"lone wolf" entrepreneurs

question

Why is vision such an important element of entrepreneurial leadership?

answer

Entrepreneur has to envision realities that do not yet exist

question

Seeking products or services that have been successful in one market and introducing the same basic product or service in another segment of the market is referred

answer

to as imitative new entry

question

For new business start-ups, opportunities come from many sources including _________ experiences, _________ that grow into businesses or lead to inventions, suggestions by friends or family, or _____________ that makes an entrepreneur aware of an unmet need.

answer

current or past work; hobbies; a chance event

question

Intense rivalry involving actions and responses among ___________ vying for the same customers in a marketplace is known as __________.

answer

similar competitors; competitive dynamics

question

Which of the following is NOT one of the three characteristics of entrepreneurial leadership mentions by the text?

answer

Clarifying job responsibilities

question

The US Small Business Administration supports small business through all of the following EXCEPT

answer

investing venture capital

question

Based on statistics reported in the text, which of the following statements is FALSE?

answer

Ninety percent of the companies financed with venture capital funds fail

question

All of the following statements about venture capital are true EXCEPT

answer

venture capital is a form of public equity financing

question

Private individuals who provide seed capital to young ventures are known as

answer

angels

question

All of the following statements about venture capital are true except

answer

venture capital is a form of public equity financing.

question

Examples of early stage financing that are commonly used by entrepreneurial start-ups include all of the following except

answer

venture capital

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