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ch6

Which of the following is NOT one of the risks of the focus strategy?
the exit of focusers from the industry
When Kimberly-Clark introduced Huggies disposable diapers against Procter & Gamble’s market leading Pampers, they were using the offensive tactic known as a
frontal assault
According to Porter, the competitive strategy that reflects the ability to provide unique and superior value to the buyer in terms of product quality, special features, or after-sale service is called
differentiation
The T in SWOT represents
threat
According to Porter, the competitive strategy that reflects the ability of the corporation or its business unit to design, produce, and market a comparable product more efficiently than its competitors is called
lower cost
Which of the following is NOT one of the eight dimensions of quality?
value
Business strategy is composed of
competitive and cooperative strategy
Porter recommends that a division with tight cost control, frequent detailed control reports, a well structured organization, and quantitatively-based incentives is required for which of the following generic competitive strategies?
overall cost leadership
Wal-Mart, McDonalds, and Alamo are all examples of companies following which of Porter’s competitive strategies?
cost leadership
When a company following a differentiation strategy ensure that the higher price it charges for its higher quality is not priced too far above the price of the competition, the company is using the process of
cost proximity
Timing tactics answer the question
when a company implements a strategy
The text authors note that the essence of strategy is
opportunity divided by capacity
Most entrepreneurial ventures follow
focus strategies
According to Porter, a business unit a competitive marketplace with no generic competitive strategy is
stuck in the middle
Which of the following was NOT one of the questions that development of a competitive strategy should raise?
should we compete by garnering political support of influential leader
The concept that advocates management’s attempt to find a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses is called
situational analysis
A car’s cruise control, known as a “bell and whistle” is an example of which of the eight dimensions of quality?
features
An acronym for the assessment of the external and internal environments of the business corporation in the process of strategy formulation/strategic planning is
S.W.O.T.
The last stage of a hypercompetititve industry is reached when the remaining large global competitors
work their way to a situation of perfect competition in which no one has any advantage and profits are minimal
What are the two generic competitive strategies that Porter promotes as the means for outperforming other corporations in a particular industry?
lower cost and differentiation
According to Porter, the term that applies to the breadth of a company’s or business unit’s target market is called
competitive scope
In a TOWS matrix, ST Strategies
consider a company’s or unit’s strengths as a way to avoid threats
Which of Porter’s competitive strategies concentrates on seeking differentiation in a particular buyer group, product line segment, or geographic market?
differentiation focus
Patagonia uses sustainability in pursuing which of Porter’s generic strategies?
differentiation
In a TOWS matrix, WT Strategies
are basically defensive and primarily act to minimize weaknesses and avoid threats
One company that has successfully found a propitious niche is
Frank J. Zamboni & Company
Orphagenix, a small biotech firm, avoids head-to-head competition with large pharmaceutical companies by developing orphan drugs to target diseases that affect fewer than 200,000 people. This is an example of which of Porter’s generic strategies?
differentiation focus
Which of the following is NOT one of the risks of a cast leadership strategy?
achieving excessive success causing jealousy amongst competitors
The focus strategies will likely predominate when many small and medium sized local companies compete for relatively small shares of the total market in a
fragmented industry
A tactic is defined by the text as
a specific operating plan specifying how a strategy is to be implemented in terms of when and where it is to be put into action
In the development of a SFAS matrix, the first step is to
list the most important EFAS and IFAS items
Which offensive tactic utilizes a head-to-head approach with the firm’s competitor by matching every category of competition from price to promotion to distribution channel?
frontal assault
Which tactic deals with where a company implements a strategy
a market location tactic
Which of the following is NOT an advantage of being a first mover?
first movers may be able to keep R & D cost low by imitating the technological advances of others
All of the following reflect criticisms of the SWOT analysis EXCEPT
provides a rational link to strategy implementation
Which offensive tactic proposes an indirect approach against the established competitor such as changing the rules of the game?
bypass attack
The text the authors note that the essence of strategy
opportunity dived by capacity
A corporation specific competitive role while is so well-suited to the firm’s internal and external environment that other corporations are NOT likely to challenge or dislodge it
propitious niche
According to Porter, a business unit in a competitive marketplace with no generic competitive strategy is
stuck in the middle
Which offensive tactic advocates attacking a part of the market where the competitor is weak?
flanking maneuver
The two general types of cooperative strategies are
strategic alliances and collusion
The first company to manufacture and sell a new product or service is called
first mover
In a TOWS Matrix, SO Strategies
are generated by thinking of ways in which a company or business unit could use its strengths to take advantage of opportunities
Which of the following is NOT an offensive tactic
raising structural barriers
The technique that illustrates how management can match the external opportunities and threats with its strengths and weaknesses to yield four sets of strategic alternatives is called a
TOWS matrix
The kind of strategic alliance in which there is a partnership of similar companies in similar industries who pool their resources to gain a benefit that is too expensive to develop alone is the
mutual service consortia
The book hypercompetition was written by
D’Aveni
Which defensive tactic was used by Southwest airlines when deliberately keeping their prices low and constantly investing in cost-reducing measures
lower the inducement for attack
Which of Porter’s competitive strategies recommends that a company emphasizes a particular buyer group or geographic market in attempts to seek a cost advantage in its targeted segment
cost focus
A method developed in the mid-1990s as an efficient means to quickly consolidate a fragmented industry can be referred to as a(n)
strategic rollup
An industry matures while overcoming fragmentation and becomes dominated by a small number of large companies, it tends to become a(n)
consolidated industry
The particular capabilities and resources a firm posses and the superior way in which the are used is called
distinctive competencies
The focus strategies will likely predominate when many small and medium sized local companies compete for relatively small shares of the total market in a(n)
fragmented industry
Business strategy focuses on
improving the competitive position of company’s or business units products or services within the specific industry or market segment that the company or business unit serves
In the development of a SFAS matrix, the first step is to
list to most important EFAS and IFAS items
As an industry becomes hypercompetititve, firms initially respond be
competing on cost and quality
If it is to be successful, Porter advices that a division posses strong marketing abilities, product engineering, a creative flair, strong capability in basic research, and a corporate reputation for quality or technology leadership, for which of the following generic competitive strategies?
differentiation
Which of the following is NOT one of the risk of a cost leadership strategy?
achieving excessive success causing jealousy amongst competitors
When lower cost and differentiation strategies have a narrow focus on a market niches, they are simply called
cost focus and differentiation focus
According to the text, unique market opportunities that are available for only a particular time are called
strategic windows
Which of the following is NOT one of the risk of the focus strategy?
the exit of focusers from the industry
Which of the following is a function of corporate culture
It conveys a sense of identity for employees
When scientists concentrate on quality control and the development of design specifications, this is referred to as
engineering R&D
Which one of the following best describes a divisional structure
This is most appropriate for large corporations with many product lines in several related industries, with employees acting as functional specialists attempting to gain synergy among divisional activities
When a company determines a competency’s competitive advantage, Barney refers to this issue as
value
The second step when analyzing the value-added chain is to
examine the linkages among the product’s or service’s value activities
Through market research, corporations can target their various products or services so that management can discover what niches to seek or develop, and how to minimize competitive pressure. This is descriptive of
market segmentation
In order to move more quickly through a product’s development stage, companies like Motorola and Chrysler are using
cross-functional work teams
What are the two distinct attributes of corporate culture
intensity and integration
When a company’s core competencies are superior to those of competitors, these are known as
distinctive competencies
The ratio of total debt to total assets is known as
financial leverage
In Christensen’s book, The Innovator’s Dilemma, he explains that managers remain with certain technologies based on
return of investment
Which of the following is NOT one of the four question areas Barney proposes in his VRIO framework used to evaluate a firm’s key resources
durability
The rate at which a firm’s underlying resources, capabilities, or core competencies can be duplicated by others is called
imitability
Which of the following best describes a simple structure?
This is most appropriate for small, entrepreneur-dominated companies with one or two product lines that operate in a small niche market, with employees acting as jack-of-all trades.
The process of taking a new technology from the laboratory to the marketplace is called
technology transfer
When a company takes apart a competitor’s product in order to find out how it works, this process is known as
reverse engineering
The second step when analyzing the value-added chain is to
examine the linkages among the product’s or service’s value activities.
An example of the promotion variable of the marketing mix is
advertising
The part of an industry’s value chain that is most important to a company and the point where its greatest expertise and capabilities lie is called the company’s
center of gravity
The particular combination of product, place, promotion, and price is called
marketing mix
Which of the following describes a typical functional structure?
Employees tend to be specialists in the business functions important to that industry such as manufacturing, marketing, finance, and human resources.
When the value chains of two separate products or services share activities, such as the same marketing channels, in order to reduce costs, this is an example of
economies of scope
Knowledge that can be easily articulated and communicated is known as
explicit knowledge
Things that a corporation can do exceedingly well across the corporation are called
core competencies
Those critical strengths and weaknesses that are likely to determine if a firm will be able to take advantage of opportunities while avoiding threats are called
internal strategic factors
On the continuum of resource sustainability, where would Sony’s Walkman be placed?
fast-cycle resources
The business model used by IBM to make money not selling IBM products, but by selling its expertise to improve their customers operations is the
customer solutions model
When examining the corporate value chain of a particular product or service, which one of the following is NOT one of the PRIMARY activities that usually occur?
auditing and accounting
Which one of the following best describes a conglomerate structure?
This is most appropriate for large corporations with many product lines in several unrelated industries; unrelatedness prevents any attempt at gaining synergy among the divisions.
Which of the following is NOT a primary activity of the value chain?
purchasing
Which of the following is NOT a function of corporate culture?
keeps people guessing what to do next
The concept that suggests that unit production costs decline by some fixed percent each time the total accumulated volume of production in units doubles is referred to as
the experience curve
Flexible manufacturing emphasizes
economies of scope over economies of scale
The rate at which a firm’s underlying resources and capabilities depreciate or become obsolete is called
durability
The breadth of an organization’s culture is also known as
cultural integration
According to the text, which one of the following is NOT descriptive of a corporation’s culture?
Corporate cultures are only temporary and can be easily changed.
As compared to a firm with low financial leverage, a firm with a high amount of financial leverage in an expanding market should have
higher earnings per share
A corporation’s ability to exploit its resources is referred to as its
capabilities
When examining the corporate value chain of a particular product or service, which of the following is NOT one of the PRIMARY activities that usually occur?
auditing and accounting
A linked set of value creating activities beginning with basic materials provided by suppliers and ending with distributors getting the final product into the hands of the ultimate consumer is called a(n)
value chain
An automobile assembly line is an example of which approach to manufacturing?
continuos system
According to Barney’s VRIO framework, the exploitation of a resource pertains to the ____ of the resource
organization
The proposition that silicon chips double in complexity every 18 months is referred to as
moore’s law
According to the text, the primary task of the operations manager is to
develop and operate a system that will produce the requires number of products or services with a certain quality, at a given cost, within an allotted time
Which of the following is NOT a responsibility of a research and development manager?
taking the design and opertionalizing the plan into mass production
What is the attribute of corporate culture that is the degree to which members of a unit accept the norms, values, or other culture content associated with the unit?
intensity
The business model used by Hp is selling printers and printer cartridges is the
multi-compnent system/installed base model
The business model used by IBM to make money not selling IBM products, but by selling its expertise to improve their customers operations is the
customer solutions model
Human Resource departments have found that to reduce employee dissatisfaction and unionization efforts, they must
consider the quality of work life in the design of jobs
Which of the following is NOT a primary activity of the value chain?
purchasing
The speed with which other firms can understand the relationship of resources and capabilities supporting a successful firms strategy is called
transparency
The particular combination of product, place, promotion, and price is called
marketing mix
When a company determines a competency’s competitive advantage, Barney refers to this issue as
value
As compared to a firm with low financial leverage, a firm with a high amount of financial leverage in an expanding market should have
higher earnings per share
According to te text, which one of the following is NOT descriptive of a corporation’s culture?
corporate cultures are only temporary and can be easily changed
______ is more valuable because it can provide companies with a sustainable competitive advantage that is harder for competitors to imitate
tacit knowledge
Through market research, corporations can target their various products or services so that management can discover what niches to seek or develop, and how to minimize competitive pressure. This is descriptive of
market segmentation
According to Barney’s VRIO framework, the exploitation of a resource pertains to the ___ of the resource
organization
When the value chains of two separate products or service share activities, such as the same marketing channels, in order to reduce costs is an example of
economies of scope
Which one of the following best describes a conglomerate structure?
this is the most appropriate of large corporations with many product lines in several unrelated industries; unrelatedness prevents any attempt in gaining synergy among the divisions
A graph showing time plotted against the dollar sales of a product as it moves from introduction through growth and maturity to decline is called the
product life cycle
Which of the following is NOT a function of corporate culture>
keeps people guessing about what to do next
Flexible manufacturing emphasizes
economies of scope over economies of scale
Which of the following is NOT descriptive of a high level of bargaining powers of buyers?
A buyer earns high profits and is very insensitive to costs and service differences.
Which environment was generally perceived by business people to be a given until the 20th century?
the natural environment
Other software companies could not compete with Microsoft based on the hesitation of consumers to try a new software. Which of Porter’s forces does this reflect?
bargaining power of suppliers
Which barrier to entry is demonstrated by Microsoft’s MS-DOS operating system?
cost disadvantages independent of size
When the pressure for coordination is strong and the pressure for local responsiveness is weak for multinational corporations within a particular industry, the industry will tend to become
global
Which of the following is NOT descriptive of “threat of substitute products or services?”
Identifying substitutes is relatively easy since they look similar.
The combination of the degree of complexity and the degree of change existing in an organization’s external environment is/are called
environmental uncertainty.
Which strategic orientation is demonstrated by companies that have a limited product line and focuses on improving the efficiency of their existing operations?
defenders
A company or an industry whose product works well with a firm’s product and without which the product would lose much of its value is considered to be a(n)
complementor
A company that operates in at least two different product-market areas in which one product is stable and the other one is variable, reflects which strategic orientation?
analyzers
Which of the following is NOT descriptive of the “threat of new entrants?”
Does not impact industry attractiveness.
A study of nearly 500 of the world’s largest corporations indicated which of the following to be the most widely practiced form of forecasting?
trend extrapolation
According to the text, the strength of each of the six driving forces of industry competition varies according to the
stage of industry evolution.
When strategic managers have a willingness to reject unfamiliar as well as negative information it is referred to as
strategic myopia
Industry analysis is primarily concerned with a corporation’s
task environment
All of the following are technological breakthroughs already having a significant impact on many industries EXCEPT
growing health consciousness.
According to Porter’s model, a low force can enable the company to earn greater profits and can be regarded as a(n)
opportunity
An industry dominated by a few large firms, all of which struggle with product differentiation, is known as
consolidated
To succeed in a hypercompetitive industry, companies by be willing to
cannibalize their own successful product lines
A company with significant assets and activities in multiple countries is known as ___
multinational corporation
Which societal force includes demographic trends?
sociocultural forces
In which type of international industry do corporations tailor their products to the specific needs of consumers in a particular country?
multidomestic industry
Companies with fairly broad product lines that focus on product innovations and market opportunities, reflect which strategic orientation?
prospectors
Which of the following is NOT a major force in the societal environment?
labor forces
The two factors that tend to determine whether an industry will be primarily multidomestic or primarily global are (1) the pressure for coordination with the MNCs operating in the industry and (2)
the pressure for local responsiveness on the part of individual country markets
When General Motors considered making their own automative parts, Delphi Automotive Supply Company would be concerned with the
bargaining power of buyers
Which type of international industry manufactures and sells the same product with only minor adjustments made for individual countries around the world?
global industry
The collective strength of the interaction of potential entrants, buyers, substitutes, firm rivalry, and other stakeholders determine
the ultimate profit potential in the industry measured in terms of long-run return on invested capital
The corporations task environment
includes those elements or groups within an organization’s industry
Which barrier to entry uses cost advantage associated with large size?
economies of scale
According to Porters model, a strong or high force is likely to reduce profits and can be regarded as a
threat
Which of the following in NOT descriptive of external environmental scanning?
used to identify strengths and weaknesses
What are the key environmental trends that are judges to have a medium to high probability of occurrence and a medium to high probability of impact on the corporation?
external strategic forces
According to the text, one reason environmental uncertainty is a threat to strategic managers is because
it hampers their ability to develop long-range plans
Which of the following is NOT descriptive of a high level of bargaining power of suppliers?
substitues are readily available
Intel was able to gain a significant cost advantage over its competitors in the production and sale of microprocessors because of
economies of scale
The issues priority matrix is used in environmental scanning is composed of two axis or dimensions which are labeled
probability of occurrence and probable impact on the corporation
Which is the largest of the current US generations?
baby boomers
Which environment was generally perceived by business people to be a given until the 20th century?
the natural environment
Which barrier to entry uses brand identification to force new entrants to spend heavily to overcome existing customer loyalty?
product differentiation
In addition to Porter’s five Forces, another force added in the text is
other stakeholders
Which of the following is NOT one of the general strategic types?
initiators
Which of the following is an example of a global industry?
tires
Which of the following is NOT descriptive of external environmental scanning?
used to identify strengths and weaknesses
What is the set of business units or firms that “pursue similar strategies with similar resources?”
strategic groups
A company or an industry whose product works well with a firm’s product and without which the product would lose much of its value is considered to be a
complementor
An industry dominated by a few large firms all of which struggle with product differentiation is knowns as
consolidated
A study of nearly 500 of the world’s largest corporations indicated which of the followings to be the most widely practiced form of forecasting?
trend extrapolation
All of the following are technological breakthroughs already heaving a significant impact on many industries EXCEPT
growing health consciousness
The U.S. major home appliance industry, including the companies of Maytag, Whirlpool, General Electric, and Electrolux, is an example of an industry
that was once fragmented, but now is consolidated
Which of the following is NOT descriptive of intense rivalry among firms?
product offerings that are highly differentiated
Which barrier to entry is demonstrated by Microsoft’s MS-DOS operating system?
cost disadvantage independent of size
A relationship that illustrated the term complementor is
microsoft and intel
Which of the following is NOT one of the general strategic types?
initiators
Which of the following is NOT an element of the organization’s task environment?
technological developments
According to Porter, the corporation is most concerned with
the intensity of competition within its industry
Those variables that can affect significantly the overall competitive positions of companies within any particular industry are known as
key success factors
Which of the following is NOT descriptive of “threat of substitute products or services?”
identifying substitutes is relatively easy since they look similar

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