MAN 4720 Capstone Midterm Practice

Comparing the return to the return on invested capital obtained by other firms in the industry

If Elton's Electronics LLC obtains an 18% return on invested capital, which of the following will help determine if it has a competitive advantage over pharmaceutical companies?

Market Butcher's Scissors as a higher-quality alternative and sell them for $15.

As the strategic manager of Butcher's Scissors, you are tasked with producing a strategy for introducing a new line of premium scissors. Your competitor produces a line of scissors at a cost of $1 dollar and sells them for $12. Because your company has inferior production capabilities, your scissors will cost $3 each to produce. However, your handle is proven to be more comfortable than your competitors'. Assuming you are guaranteed to sell the same number of units as your competitor, which of the following strategies is most likely to achieve a competitive advantage?

A vision defines what an organization wants to accomplish ultimately. A mission describes how the vision is accomplished.

Which of the following summarizes the difference between a firm's vision and mission?

Strategic Position

Relates to its ability to create value for customers (V) while containing the cost to do so (C).

Competition

In Porter's Five Forces, __________ is not defined narrowly as a firm's closest competitors but rather more broadly to include other forces in an industry.

Firm Effects

Have the biggest impact of up to 55%. Because firm effects come from the actions managers take.

Threat of New Entrants is most likely low

A new client of ASI called Wired LLC operates in an industry characterized by the presence of strong network effects, high brand loyalty, high economies of scale, and proprietary technology among incumbent firms thus we can conclude that the:

Backward Integration

Occurs when a buyer moves upstream in the industry value chain, into the seller's business.

Perfect Competition

Fragmented and has many small firms, a commodity product, easy of entry, and little or no ability for each individual firm to raise its prices.

Oligopoly

Consolidated with few (large) firms, differentiated products, high barriers to entry, and some degree of pricing power. A key feature is that the competing firms are interdependent. With only a few competitors in the mix, the actions of one firm influence the behaviors of the others.

Industry Convergence

A process whereby formerly unrelated industries begin to satisfy the same customer need. Often brought on by technological advances.

Direct Competitors

Companies in the same strategic group are _______ to each other.

Profitability Varies

Which of the following statements is true about strategic groups?

SWOT Analysis

Is a framework that allows managers to synthesize insights obtained from an internal analysis of the company's strengths and weaknesses (S and W) with those from an analysis of external opportunities and threats (O and T).

Primary Activities

Production plants are part of a firm's operations. Operations are primary activities in the value chain analysis.

Business model sells products or services for which demand is negatively correlated at a discount.

Which of the following scenarios best illustrates bundling?

Razor-Razor Blade Business Model

The initial product is often sold at a loss or given away for free in order to drive demand for complementary goods.

Differentiation Strategy

Seeks to create higher value for customers than the value that competitors create, by delivering products or services with unique features while keeping costs at the same or similar levels, allowing the firm to charge higher prices to its customers.

Cost-Leadership Strategy

Seeks to create the same or similar value for customers by delivering products or services at a lower cost than competitors, enabling the firm to offer lower prices to its customers.

How is a cost-leader protected from threats from powerful suppliers?

A cost leader is fairly well isolated from threats of powerful suppliers to increase input prices because it is more able to absorb price increases by accepting lower profit margins.

Ask them what business they're in; do they consider themselves more of a grocer or a food retailer?

Your client is the owner of a small grocery store located in Jacksonville, FL called "The Mellon Head." They sell various fruits and vegetables but also ready to eat meals (RTE). The Mellon Head's been in business for three years and have thrived on "the locals." Your first step is to...

Now that you have the NAICS code you begin pulling reports from

IBISWorld, Marketline, Mergent Intellect, Business Insights Essentials.

Marketline

Now if you only you can remember which specific library database offer's a complete Porter's Five Forces analysis? You must choose from the list below, but choose wisely, for the correct answer will allow you to proceed while the incorrect one will force your journey BACK to the very beginning

Strategic Management

________ is best described as an integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage.

It was not backed up with strategic commitments.

Green Jeans, Inc. had a mission to become the leading producer of environmentally friendly blue jeans, an emerging and in-demand category in the apparel industry. Its strategy involved leveraging a network of organic cotton farmers and suppliers of environmentally responsible synthetic materials to create a product that is durable, attractive, affordable, and 100% recyclable. However, because it did not upgrade its outdated production facilities, Green Jeans could not assemble its products at a low-enough cost to offer the jeans at a price that was attractive to customers. Green Jeans' strategy failed because

Comparing the return to the return on invested capital obtained by other firms in the electronics industry

If Elton's Electronics LLC obtains an 18 percent return on invested capital, which of the following will help determine if it has a competitive advantage over pharmaceutical companies?

Political Factors

The government of Wakanda has proposed a regulatory change in the labor law to increase their standard annual minimum wage to $55,000 per year. Which of the following PESTEL factors in this firm's general environment does this mandate best represent?

Strategic Position

Sweet Cheezus is a brand-new restaurant that opened up in Downtown Orlando. They've hired you, a trained ASI analyst, to help them determine their ________ which you've explained relates to their ability to create value for their customers (V) while containing the cost to do so (C).

Competition

You've just run into a new ASI client that wants you to explain the concept of Porter's Five Forces. You confidently state that one big takeaway from the tool is that ________ is not defined narrowly as a firm's closest competitors but rather more broadly to include other factors mentioned in your ASI Corporate Training sessions.

"Firm effects. I will be able to have the most impact on those."

Congratulations on completing your ASI strategy training! As a result of your recent accomplishment, you've been chosen for a very prestigious position at a fortune 500 company. During your interview, your new potential employer asked, "If you get this job, will you focus more on industry effects or firm effects?" You smile for a moment and then respond by saying:

Decreased industry profit potential

A new firm named Turn-it-UP Inc. entered the radio retail industry. After performing an initial analysis, you find that this is a very consolidated industry. In response to Turn-it-UP's entrance into this industry, the two large incumbent radio firms, Listen Again LLC and Dude FM, lowered the price of their radios. They also spent more money to improve their radios and on additional marketing. By doing this, Listen Again LLC and Dude FM

Backward Integration

Soapsuds Inc., a manufacturer of cleaning agents, supplies its products to All Needs Inc., a supermarket chain. It demands that All Needs create more shelf space in its stores for Soapsuds' products. However, All Needs Inc. refuses to do this. Instead, it decides to produce its own range of cleaning agents with its own label "All Wash." In this scenario, All Needs Inc. has exercised its bargaining power as a buyer through:

Perfect Competition

When companies that manufacture shipping containers want to buy iron ore, the purchase decision is solely based on price. This is because there are a large number of sellers in the iron ore industry, and iron ore is a highly undifferentiated commodity. Which of the following industry competitive structures does the iron ore industry best illustrate?

Oligopoly

Enterprise Holdings, The Hertz Corporation, and Avis Car Rental, the three largest firms in the car rental industry, hold close to 94 percent of the industry's market share. These companies mainly compete against each other by providing unique features in their products rather than pricing them low. These firms are interdependent, and each firm must consider the strategic actions of its competitors. Which of the following industry competitive structures does this scenario best illustrate?

Industry Convergence

With the emergence of smartphones, users no longer have to carry a separate music player, a video game, a laptop, or a magazine to keep themselves entertained when traveling. A smartphone is loaded with a variety of applications to satisfy all the customer needs that different industries or products individually satisfied earlier. As a result, the smartphone industry has been posing a threat to a lot of other unrelated industries. What is this phenomenon best known as?

Core Rigidity

Jill's Computer Repair had the ability to provide thorough and expert service while charging moderate prices and offering a money-back guarantee which allowed her firm to maintain a competitive advantage. The company's management has frequently disregarded employee requests to speed up their procedures since they are so dedicated to performing repairs correctly. A new local business that provides same-day in-home repairs and round-the-clock online customer care has just started to steal consumers from Jill's firm. The dynamic capabilities viewpoint asserts that Jill's Computer Repair's competitive advantage has diminished because of a________

SWOT Analysis

ASI employee, Juliana, is working diligently to scan and connect the company's internal environment to its exterior world. Her ability to successfully exploit external opportunities while reducing internal weaknesses and external dangers will be made possible by her ASI corporate training. Which of the following managerial techniques is Juliana using in this situation?

Primary Activity

Strategy Soups and Sauces LLC is a new client of ASI and competes in the food manufacturing industry. They wish to implementing new equipment in their production plants to reduce the amount of time it takes to apply packaging to its finished products. By doing this, Strategy Soups and Sauces LLC is addressing a ________ in the value chain analysis.

External Threat

Planet of the Grapes LLC maintains a distribution plant located overseas. The local government has just been overthrown by a military group that opposes foreign influence in the country. This political situation would be classified as an __________if using the SWOT analysis tool.

$3 billion, that is, 30 million shares × $100.

A firm has 30 million shares outstanding, and each share is traded at $100. Also, each shareholder gets a dividend of $2,000 annually. In this case, the market capitalization is:

Strategy

is defined as the goal-directed actions a firm takes to gain (and sustain) competitive advantage over their rivals.

Competitive Advantage

is a firms ability to generate ABOVE average returns relative to that firm's competitors.

AFI Strategy Framework

Every self-respecting strategist follows the:

Art & Science

Mastering strategy is part ___ and part _______.

Visions

Highlight the values and aspirations that lay at the heart of the organization.

Mission

A...outlines the reasons for the organization's existence and explains what role it plays in society.

Values

_____ are the fundamental beliefs about what's important and what is and isn't appropriate in conducting company activities.