BUS-485 Midterm

Southwest Airlines' tightly integrated activities make its cost leadership strategy more vulnerable to imitation than if its activities were loosely integrated.

False

The new CEO of Opacity Enterprises is determined to make the long-established firm strategically flexible, but the task is complicated due to inertia.

True

Walmart's strategy to attract more upscale customers will likely succeed because cost leaders are good at differentiating.

False

An interior decorator has moved his business from Los Angeles to St. Paul, Minnesota, because his spouse's company transferred her to St. Paul. The decorator is distressed because the customers in his target market have, in his words, "banal and bourgeois taste." Which of the following is the decorator's problem?

The decorator does not understand that customer needs are neither right nor wrong, and neither good nor bad.

A major department store chain has a strict policy of banning photographs or videos of its sales floor or back-room operations. It also does not allow academics to conduct studies of it for publication in research journals. In fact, some of its own top managers refer to the management's policies on secrecy as "verging on paranoid." These policies indicate that the top management of the firm believes the organization's core competencies are

imitable.

Consolidation among fuel providers serving airport facilities is viewed in the five forces model of competition as a(n)

Increase in the bargaining power of suppliers of a critical input.

The Department of Defense buying aircraft for national security reasons exemplifies what type of barrier to entry?

Government policy.

Two firms, such as a small local restaurant and Olive Garden, are direct and acknowledged competitors despite sharing few markets.

False

Boeing's decision to build the super-efficient 787 jetliner is considered a tactical action.

False

It is more likely that locally owned, one-location cafes in a small town will respond more rapidly to tactical actions by each other than they will to strategic actions by the Burger King franchise that has recently moved to their town

True

Carl has just graduated with a management degree. He has a good understanding of his personal strengths and weaknesses and knows he would fit best in a stable organizational environment. In his job search, Carl should target firms in slow-cycle markets

True

New markets created by the technologies underlying the development of products such as iPods, iPads, and Wi-Fi are a result of:

Disruptive technologies.

Chelsea Milling Company’s lack of advertising allows it to pursue a specific type of strategy. What is it?

Cost leadership.

If Southwest Airlines’ employees lost enthusiasm, what would be the impact?

Southwest would have lost one of its competitive advantages, and its performance would be threatened

Which of the following would NOT be identified in an analysis of the economic portion of the general environment?

The ability of Ford to issue new debt in light of its recent financial performance.

Which of the following is a true statement about capabilities?

Capabilities are often developed in specific functional areas such as manufacturing, R&D, and marketing.

All of the following are examples of efforts by firms to address the physical segment of the general environment EXCEPT the

Increase in hiring of women and minorities at Microsoft.

Blind taste-tests have shown that the taste of premium-priced vodkas and inexpensive vodkas are indistinguishable even to regular drinkers of vodka. But the sales of premium vodkas are thriving. This is an example of the

Perception of perceived prestige and status as a means of differentiating a product.

A veterinary practice has added a pet boarding and grooming facility. Most of the practice's competitors also provide these services. The veterinary practice is gaining competitive

Parity.

Revenues for United Parcel Service (UPS) are derived from the following business segments: 60 percent from U.S. package delivery operations, 22 percent from international package delivery, and 18 percent from non-packaging operations. The best description of the corporate-level strategy of UPS is unrelated diversification.

False

Walmart uses core competencies, such as information technology and distribution channels, to create value for its customers through its "everyday low prices."

True

In a money-making effort, a small private university has decided to institute consulting services using its business faculty as consultants whose services would be sold to clients. This university is attempting to use its faculty to gain economies of scope

True

When Delta Air Lines wants to study Continental Airlines, it must examine both Continental and its complementor, Star Alliance.

True

The use of the Internet by Netflix to collect data on customer preferences is an example of

scanning

Walmart initially used a focused cost leadership strategy to compete only in small communities by using sophisticated logistics systems and efficient purchasing practices to gain a competitive advantage. The response of local competitors was __________ because they __________

slow; lacked the ability to marshal resources

Which of the following is an example of a tactical action?

Netflix beginning to offer music in addition to movies

The Publicis Groupe uses the digital technology from its digital business to enhance the advertising products in its advertising group. This sharing of activities is characteristic of the __________ diversification strategy.

related constrained

Akamai Technologies is a dominant player in the content delivery network (CDN) market. Akamai is not very diversified (i.e., is dependent on the CDN market). If rival CDN providers such as Limelight Networks and Level 3 Communications lower their basic CDN service prices, which of the following would Akamai likely do?

Lower its prices

Which of the following organizations has the highest market dependence?

Company that specializes in making replacement tiles for the space shuttle

Which of the following statements is true?

Related constrained firms share more tangible resources and activities between businesses than do related linked firms

Greenleaf Property Management has been earning below-average returns for the last three years. Which of the following statements is true?

Greenleaf will not be able to minimally satisfy all stakeholders

New Balance Athletic Shoes target baby boomers' needs for well-fitting shoes. The company is unique in that it offers a very broad range of shoe widths. A realistic potential risk New Balance runs in this focused differentiation strategy includes the possibility that:

a competitor may be able to better use flexible manufacturing systems to make shoes with an individualized fit.

PorkPride Foods produces hams and other meat products. It owns hog raising operations. This is an example of a business that is:

vertically integrated

The Walt Disney Company has successfully used related diversification to create value by

sharing activities and transferring core competencies.

JCPenney attempted the strategy of __________. But it couldn't out __________ Walmart, nor could it __________ Macy's and Target.

integrated cost leadership; price; compete with

The owner of a store that sells fine-quality fabrics for home seamstresses bemoans the fact that few young women know how to do fine tailoring, much less simple dressmaking. Many potential customers are unable to appreciate the premium quality of the fabrics and are deterred by the high prices, as well as the complexity of fine sewing. In the past, the store had a strong demand for fabrics, large classes for women learning the fine points of sewing, and a reputation for excellent service and technical advice. Now the store is earning lower-than-average returns. This case is an example of

core competencies that have become core rigidities.

A company competing in a single product market has

one business-level strategy and one corporate-level strategy