Exam 2 595 – Flashcards
Unlock all answers in this set
Unlock answersquestion
In a focused cost-leadership strategy, a firm:
answer
delivers low-cost products and services to a specific, narrow part of the market.
question
A company that uses a differentiation strategy can achieve a competitive advantage as long as its:
answer
economic value created is greater than that of its competitors
question
Which of the following is more of a value driver than a cost driver?
answer
Superior customer service
question
_____ is best described as the output range needed to bring down the cost per unit as much as possible, allowing a firm to stake out the lowest-cost position that is achievable through economies of scale.
answer
Minimum efficient scale
question
Which of the following statements accurately brings out the difference between economies of scale and learning effects?
answer
While there are no diseconomies to learning, there are diseconomies to scale.
question
A cost-leader is protected from the threat of new entrants primarily due to its:
answer
economies of scale.
question
A differentiator is least likely to be threatened by increases in input prices due to powerful suppliers when the:
answer
differentiator is able to create a significant difference between perceived value and current market prices.
question
In a successful _____, the trade-offs between differentiation and low cost are reconciled.
answer
integration strategy
question
_____ is best described as the process of manufacturing a large variety of tailor-made products or services at a relatively low unit cost.
answer
Mass customization
question
The productivity frontier function is concave, and it captures the:
answer
trade-off between value creation and production cost
question
In which of the following stages of the industry life cycle is a standard first established?
answer
Growth stage
question
Which of the following statements is true of a disruptive innovation?
answer
It invades the market from the bottom up, by first capturing the low end.
question
Large companies have been shifting their knowledge landscape from closed innovation to open innovation because of the:
answer
increasing supply and mobility of skilled workers.
question
In a radical innovation, a firm targets:
answer
new markets by using new technologies.
question
The typical four-step innovation process begins with:
answer
the presentation of an idea as findings derived from basic research.
question
Why is the phase after the growth stage of the industry life cycle referred to as the shakeout stage?
answer
The weaker firms are forced out of the industry in this stage.
question
In the context of the long tail phenomenon, what does the short head represent?
answer
Products that appeal to the largest segment of the market with homogenous tastes
question
_____ is best described as the commercialization of any new product, process, or the modification and recombination of existing ones.
answer
Innovatoin
question
What is the basic tenet of the crossing-the-chasm framework?
answer
Each stage of the industry life cycle is dominated by a different customer group.
question
Generally, as the level of _________ innovation declines, the level of _________ innovation increases.
answer
product; process
question
Which of the following is an example of an internal transaction cost?
answer
The cost of maintaining a production unit
question
A primary advantage of organizing economic activity within firms is the:
answer
ability to coordinate highly complex tasks to allow for specialized division of labor
question
_____ is best described as a situation in which one party is more informed than another, because of the possession of private information.
answer
Information asymmetry
question
_____ are best described as voluntary arrangements between firms that involve the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services to lead to competitive advantage.
answer
Strategic alliances
question
Each stage of the vertical value chain typically represents a distinct _____ in which a number of different firms are competing.
answer
Industry
question
_____ are best described as unique assets with high opportunity costs that have significantly more value in their intended use than in their next-best use.
answer
specialized assets
question
A firm follows a(n) _____ when less than 70 percent of its revenues come from a single business and there are few, if any, linkages among its businesses.
answer
unrelated diversification strategy
question
Companies that pursue related diversification are able to create a diversification premium because they:
answer
are able to increase value due to economies of scope.
question
In the Boston Consulting Group (BCG) growth-share matrix, strategic business units categorized under dogs:
answer
hold a small market share in a low-growth market.
question
An organization that is organized according to strategic business units (SBUs) and also along organizational structures is most likely using a _____ structure.
answer
Matrix
question
A drawback involved in using cross-border strategic alliances to enter new foreign markets is that:
answer
some of the firm's proprietary know-how may be appropriated by the foreign partner
question
When a standalone organization is created and owned by two or more parent companies together, the strategic alliance is referred to as a(n) _____.
answer
Joint Venture
question
When does a merger between companies typically occur?
answer
When two firms of comparable size join to form a combined entity
question
Which of the following is an advantage of equity alliances when compared to non-equity alliances?
answer
They produce stronger ties between partners.
question
The process of alliance management begins with _____.
answer
selecting the best possible partner
question
When a firm does not have the resource required for pursuing a growth strategy, and if the resource in question is not easily tradable, the implication for the strategist is most likely to:
answer
consider an outright acquisition.
question
reasons why firms enter alliances?
answer
To strengthen competitive position To learn new capabilities To enter new markets, either in terms of geography or products and services
question
Supply, distribution, and licensing contractual agreements between firms, which result in vertical strategic alliances, are all examples of _____.
answer
non-equity alliances
question
a result of horizontal integration
answer
There is a reduction of excess capacity in the market.
question
A _____ is best described as a voluntary arrangement between firms that involves the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services.
answer
strategic alliance
