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Chaminade MBA800 Midterm exam




Question;MBA800 Strategic Management;Question 1.1. Apple's iPod and iPad are examples of: (Points;1);the march of;globalization;rapid;technological diffusion;disruptive technologies;products that;were not imitated by competitors;Question 2.2. Essentially, ____________has become one of the;world's largest markets with 700 million potential consumers. (Points: 1);the European Union;the United;States;China;Japan;Question 3.3. The five forces model suggests that an;industry's profitability is a function of all the following factors except: (Points;1);buyers;competitive;rivalry;suppliers;the economic environment;Question 4.4. Generally speaking, product market;stakeholders are satisfied when: (Points: 1);a firm's profit margin yields;the lowest return to capital market stakeholders that is acceptable to them.;a firm's profit;margin yields an above-average return to its capital market stakeholders.;the interests;of the firm's organizational stakeholders have been maximized.;the interests;of all stakeholders have been at least minimally satisfied.;Question 5.5. A competitive advantage: (Points: 1);can be;permanent if the firm has successfully implemented the strategic management;process.;entails;reducing investors' risk to near zero.;can be identified only if it has;been unsuccessfully challenged by competitors.;exists when;competing firms are unable to find investors.;Question 6.6. The likelihood of entry of new competitors is;affected by _________and__________. (Points: 1);barriers to entry, expected;retaliation of current industry organizations.;the power of;existing suppliers, buyers.;the;profitability of the industry, the market share of its leading firm.;the demand for;the product, the profitability of the competitors.;Question 7.7. New entrants to an industry are more likely;when: (Points: 1);it is difficult;to gain access to distribution channels.;economies of;scale in the industry are high.;product differentiation in the;industry is low.;capital;requirements in the industry are high.;Question 8.8. In the airline industry, consolidation among;fuel providers serving airport facilities would be considered as;factor in the five forces model of competition. (Points;1);a reduction of;the airlines' abilities to enjoy economies of scale.;an increase in;switching costs because the airlines have no choice but to use jet fuel and;other oil products.;an increase in;the bargaining power of suppliers of a critical input.;an increase in;the intensity of rivalry among airlines for scarce resources.;Question 9.9. By emphasizing core competencies when;formulating strategies, companies learn to compete primarily on the basis of;(Points: 1);intangible;resources.;their primary;activities.;firm-specific;differences.;efficiency of;production.;Question 10.10. Competitive advantage typically comes from;(Points: 1);individual;resources.;one unique;resource.;several;outstanding resources used independently.;the unique;bundling of several resources.;Question 11.11. Organizational culture is: (Points: 1);amorphous and;changeable.;not easily;imitable.;so difficult to;analyze that most firms should choose to ignore it.;typically;fragile in the face of changes in the external environment.;Question 12.12. Outsourcing is the: (Points: 1);spinning off of;a a value-creating activity to create a new firm.;selling of a;value-creating activity to other firms.;purchase of a;value-creating activity from an external supplier.;use of;computers to obtain value-creating data from the Internet.;Question 13.13. PetSmart provides services and products for;pet owners which are not available through other outlets. PetSmart's business level strategy is best;described as: (Points: 1);focused cost;leadership.;cost;leadership.;differentiation.;stuck-in-the-middle.;Question 14.14. Business-level strategies are concerned;specifically with: (Points: 1);creating;differences between the firm's position and its rivals.;selecting the;industries in which the firm will compete.;how functional;areas will be organized within the firm.;how a business;with multiple physical locations will operate one of those locations.;Question 15.15. Michael Porter points out that strategic fit;among activities is fundamental to: (Points: 1);the development;of core competencies for a firm.;the breath of;competitive scope for a firm.;sustainability of a firm's competitive;advantage.;the integrity;of the firm's value chain.;Question 16.16. All of the following are considered generic;business-level strategies EXCEPT: (Points: 1);product;diversification.;cost leadership.;focused;differentiation.;integrated cost;leadership/differentiation.;Question 17.17. When the cost of supplies increase in an;industry, the low-cost leader: (Points: 1);may continue;competing with rivals on the basis of product features.;will lose;customers as a result of price increases.;will be unable;to absorb higher costs because cost-leaders operate on very narrow profit;margins.;may be the only;firm able to pay the higher prices and continue to earn above-average returns.;Question 18.18. A firm successfully implementing a;differentiation strategy would expect: (Points: 1);customers to be;sensitive to price increases.;to charge;premium prices.;customers to;perceive the products as standard.;to have high;levels of power over suppliers.;Question 19.19. First movers are: (Points: 1);entrepreneurs;who lead in the establishment of new industries.;firms that are;first to exit a declining industry.;firms that take;an initial competitive action.;individuals who;move frequently as employment opportunities change in a locale.;Question 20.20. All competitive advantages do not accrue to;large-sized firms. A major advantage of;small firms is that they: (Points: 1);are more likely;to have organizational slack.;can launch;competitive actions more quickly.;have more loyal;and diverse workforces.;can wait for;large firms to make mistakes in introducing innovative products.;Question 21.21. Walt Disney's focus on ___________ is;typical of a slow-cycle market. (Points: 1);innovation.;total quality.;proprietary;rights.;economies of;scale.;Question 22.22. Lawsuits over patent and copyright;infringement are more common and intense in: (Points: 1);fast-cycle;markets, because the market is innovation-driven.;standard-cycle;markets, because the firm's brand name is such an important competitive;advantage.;slow-cycle;markets, because of the ability to shelter the company from imitation of its competitive advantage.;standard-cycle;markets, because innovation is rare, and so gives the innovating firm a;significant competitive advantage.;Question 23.23. The ultimate test of the value of a;corporate-level strategy is whether the: (Points: 1);corporation;earns a great deal of money.;top-management;team is satisfied with the corporation's performance.;businesses in;the portfolio are worth more under the management of the company in question;than they would be under any other ownership.;businesses in;the portfolio increase the firm's financial returns.;Question 24.24. GE has reorganized from eleven businesses;down to six core businesses. The purpose;of this reorganization was to transfer core competencies in different types of;technologies among GE's businesses. This;is an example of: (Points: 1);increasing;market power through vertical integration.;efficient;internal capital allocation.;a focus on;financial economies.;increasing;corporate relatedness.;Question 25.25. Firms;that have selected a related diversification corporate-level strategy;seek to exploit: (Points: 1);control shared;among business-unit managers.;economies of;scope between business units.;the favorable;demand of buyers.;market power.;Question 26.26. External incentives to diversify include;(Points: 1);the fact that;other firms in an industry are diversifying.;pressure from;stockholders who are demanding that the firm diversify.;changes in;antitrust regulations and tax laws.;a firm's low;performance.;Question 27.27. The more sharing of resources and activities;among businesses, the more __________ is the relatedness of diversification.;(Points: 1);linked;constrained;integrated;intense;Question 28.28. There are few true mergers because: (Points;1);few firms have;complementary resources.;integration;problems are more severe than in outright acquisitions.;one firm;usually dominates in terms of market;share or firm size.;of managerial;resistance. True mergers result in;significant managerial-level layoffs.;Question 29.29. A primary reason for a firm to pursue an;acquisition is to: (Points: 1);avoid increased;government regulation.;achieve greater;market power.;exit a;hyper-competitive market.;achieve greater;financial returns in the short run.;Question 30.30. The fastest and easiest way for a firm to;diversify its portfolio of business is through acquisition because: (Points;1);of barriers to;entry in many industries.;it is difficult;and time intensive for companies to develop products that differ from their;current product line.;innovation in;both the acquired and the acquiring firm is enhanced by the exchange of;competencies resulting from acquisition.;unrelated;acquisitions are usually uncomplicated because the acquired firm is allowed to;continue to function independently as it did before the acquisition.;Question 31.31. An effective vision statement will specify;the market to be served. (Points: 1);True;False;Question 32.32. Organizational vision and mission statements;serve as emotional tools for the firm, and, as such, have little impact on firm;performance. (Points: 1);True;False;Question 33.33. Although organizational cultures vary;considerably, one cannot make an objective judgment that some organizational;cultures are more or less functional than others. (Points: 1);True;False;Question 34.34. An organization's willingness to tolerate or;encourage unethical behavior is a reflection of its core values. (Points: 1);True;False;Question 35.35. The objective of assessing the external;environment is to determine the timing and significance of the effects of;environmental changes and trends on the strategic management of the firm.;(Points: 1);True;False;Question 36.36. Because the health of a nation's economy;affects the performance of individual firms and industries, companies study the;economic environment to identify changes, trends, and their strategic;implications. (Points: 1);True;False;Question 37.37. Early adopters of new technology often;achieve higher market shares and higher returns than later adopters of the;technology. (Points: 1);True;False;Question 38.38. Generally, the stronger the competitive;forces, the higher the profit potential of an industry. (Points: 1);True;False;Question 39.39. Analyzing the internal environment enables a;firm to determine what it might do by identifying what opportunities and;threats exist. (Points: 1);True;False;Question 40.40. In the long run, if an organization does not;change it will fail. (Points: 1);True;False;Question 41.41. Outsourcing can add value to the product;provided to the customers. (Points: 1);True;False;Question 42.42. A competitive advantage can be created when;several resources are bundled together in a unique fashion. (Points: 1);True;False;Question 43.43. The fundamental object of business level;strategy is to earn above-average returns. (Points: 1);True;False;Question 44.44. To position itself differently from;competitors, a firm must decide to either perform activities differently or to;perform different activities. (Points: 1);True;False;Question 45.45. The best of the generic business strategies;is the integrated cost leadership/differentiation strategy. (Points: 1);True;False;Question 46.46. A low-cost leader may create entry barriers;to potential entrants by continually improving its levels of efficiency.;(Points: 1);True;False;Question 47.47. It is much easier for a firm to implement;strategic actions than tactical actions. (Points: 1);True;False;Question 48.48. Firms in a slow-cycle market are shielded;from imitators for long periods of time. (Points: 1);True;False;Question 49.49. The drivers of competitive behavior are;awareness of the competitor, motivation to take action or respond, and the;organization''s ability in terms of resources and flexibility. (Points: 1);True;False;Question 50.50. Economies of scope are cost savings;resulting from a firm successfully leveraging, either through sharing or;transferring, some of its capabilities and competencies developed in one;business to another business. (Points: 1);True;False;Question 51.51. Many manufacturing firms are de-integrating;and moving to independent supplier networks. (Points: 1);True;False;Question 52.52. Related diversification by a firm tends to;reduce a manager's executive compensation, whereas unrelated diversification;tends to increase it because the firm has moved into new industries. (Points;1);True;False;Question 53.53. Evidence suggests that acquisitions usually;lead to favorable financial outcomes, especially for the acquiring firm. (Points: 1);True;False;Question 54.54. Evidence suggests that returns to;shareholders of acquired firms are greater than those for acquiring firms.;(Points: 1);True;False;Question 55.55. Most acquisitions that are designed to;achieve greater market power entail buying a competitor, a supplier, a;distributor, or a business in a highly related industry. (Points: 1);True;False;Question 56.56. GE is an example of a firm following the;related constrained diversification strategy. (Points: 1);True;False;Question 57. 57. What is the value to the firm of having a;specified mission and vision? (Points: 3);Question 58. 58. How does an organization identify internal;strengths and weaknesses? (Points: 3);Question 59. 59. Describe the different business-level;strategies. (Points: 3);Question 60. 60. What do we mean by slow-cycle, fast-cycle;and standard-cycle markets? (Points: 3);Question 61. 61. Provide an example of a first mover and a;second mover, and discuss how they have affected one another over time. (Points;3);Question 62. 62. What do we mean by operational and;corporate relatedness? (Points: 3);Question 63. 63. Describe the differences in mergers;acquisitions, and takeovers. (Points: 3);Question 64. 64. What are some reasons why acquisitions may;or may not be successful? (Points: 3);Question 65. 65. Define restructuring and provide an;example. (Points: 3)


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