strat

Martha received a tip from a close friend who is an executive manager of a publicly traded company called TelAmeriCorp Inc. The manager received some inside information about how to trade TelAmeriCorp stock to get a huge profit. He shared this information with Martha. This scenario is an example of

Information asymmetry

Blackzim Inc. entered the low-priced digital watch market several years ago. This firm's earnings have been unsteady but might be growing. According to the BCG growth matrix, Blackzim is a

question mark.

The German multimedia conglomerate Bertelsmann operates in more than 60 countries throughout the world and owns many regional leaders in their specific product categories, including Random House Publishing in the United States. Bertelsmann operates its more than 500 regional media divisions as more or less autonomous profit-and-loss centers, but it attempts to share best practices across units. Global learning and human resource strategies for executives are coordinated at the network level. Bertelsmann is following a(n)

Transnational strategy

Bailey Building and Loan Association, a publicly traded company, has ten members on its board. Of the ten members, six members are employees of the company—including the CEO, who also chairs the board. The board has been failing in its responsibilities toward the shareholders, who now want a new board. Assuming that the total number of board members remains constant, how many outside directors should the shareholders appoint to Bailey Building and Loan Association's board to achieve board independence?

7

Ghada is the CEO of Black Mesa Inc., a publicly traded company. The shareholders want Ghada on the board of directors despite her recent appointment as the CEO. This decision of the shareholders is most likely because Ghada is

likely to provide the board with valuable inside information.

When Susan, the CEO of Gregarious Simulation Systems, expanded her operations to a different international market, she was surprised to see how little competition she faced. In her home country, the competition for simulation systems is incredibly fierce. As a result of her international expansion, her firm has been able to easily position themselves as a major player. Which of the four categories of Porter's Diamond framework best explains this advantage?

competitive intensity in the focal industry

Which of the following is an unintended side effect of a high degree of specialization in an organization?

reduced employee satisfaction due to repetition of tasks

Which of the following best explains why a board of directors may grant stock options as part of a compensation package?

to align incentives between shareholders and management

Funholding Inc. is a large multinational company owned by two partners, is active in the petroleum, capital market, chemicals, steel, beverages, hospitality, airlines, education, automobiles, and consumer electronics industries. The company has multiple brands and a large product portfolio under its banner. Which of the following terms would best describe this company?

conglomerate

Which of the following perspectives best supports the shared value creation framework?

Externalities such as pollution, wasted energy, and costly accidents actually create internal costs.

Jonathan is the owner of a landscaping company that caters to a very wealthy clientele. His company has struggled to differentiate itself from the other high-end landscapers in the area, but because he has hired several expensive but highly qualified team members, Jonathan is unable to shift to a cost-leadership strategy. Which strategy is most likely to achieve a competitive advantage?

Narrow the scope of competition and focus on unique features such as the use of organic materials.

When a differentiator charges a similar price as its competitors in the same strategic group but offers more perceived value, it

gains market share from other firms

Billy is the CEO of Billy's Kicks, a soccer ball retailer. He decides to purchase the synthetic rubber manufacturing firm so he can create his own soccer balls and sell them, nationally, in his retail stores. In order to do this, Billy will need to engage in ________, which is a corporate level strategy.

backward vertical integration

Hooper's Store Inc. started a chain of organic supermarkets that had initial success. The managers achieved a mastery of the firm's current environment, thereby filling a need in the market. However, Hooper's Store defined and measured it success by financial metrics, with a focus on short-term performance. As a result, the firm put in place metrics and systems to accommodate and manage increasing firm size due to continued success. As a result of this tightly coupled system, Hooper's Store developed a(n)

Resistance to change

Which of the following is most likely an accurate statement?

The multinational enterprise Burns Industries benefited from advances in communications technology.
Globalization benefits MNEs through improved communication

Omni Consumer Products operates as a strategic business unit (SBU) under Total Inc., a home-furnishings manufacturer. From this information, it may be reasonable to infer that

Omni Consumer Products is led by its own CEO (or equivalent general manager).

Soylent Corporation is a major nutritional supplement chain. Its managers are motivated to grow the firm in order to increase their market power and change the industry structure in their favor. Which of the following strategies is most associated with their motive for growth?

purchasing competitors

Kate is the CEO of a firm. She has an opportunity to increase the competitive advantage of her company but is not sure if accepting the opportunity is ethical. Which of the following questions would help her decide if accepting the opportunity is ethical?

How would the media report her decision to accept the opportunity if it were to become public? (newspaper)

Which of the following is a common result of a hostile takeover of a company?

The new owner sells the company in pieces.

The fact that both Whole Foods (a high-end grocery store) and Aldi (an inexpensive grocery store) have a competitive advantage in the grocery store industry is an indication that

following a different generic business strategy within the same industry can lead to a competitive advantage for more than one organization.

Which of the following accurately describes an organic organization?

a flexible organization that fosters fast decision making and high employee motivation

Duke & Duke Autos Inc. has shifted its research and development unit from its home country to Germany. This allows the company to be better informed about the latest developments in the automotive industry by tapping into the highly advanced automotive industry in Germany. In this scenario, Duke & Duke Autos Inc. is reaping the benefits of

location economies

CooCoo Cola has successfully achieved a competitive advantage in the soft drink industry as a differentiator. Which of the following scenarios would undermine CooCoo's position?

CooCoo's customers start to consider soda a commodity.

A drawback of short-term contracting as an alternative to making a component in-house is that

the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality.

Why are controls like budgets and operating procedures that McDonald's implements known as input controls?

They are considered before employees make any decisions.

Which of the following statements best explains why Walmart is finding it difficult to replicate its existing business model in India?

because of the political differences between India and the United States

Finger Lickin' BBQ is a chain of casual restaurants that promises affordable barbecue using top-quality local ingredients. However, the company has struggled to achieve a competitive advantage because of its high overhead costs. Which of the following scenarios is most likely to result in a competitive advantage?

eliminating brick-and-mortar locations and offering delivery from a central kitchen

Why does Michael Porter recommend expanding the customer base of an organization in terms of the shared value creation framework?

Doing so could yield significant business opportunities that could improve the standard of living of the poor.

Which quadrant in the core competence–market matrix is the hardest to pursue?

building new core competencies to create and compete in markets of the future

Rundofase International, a large conglomerate, procures a few component parts from external suppliers and also manufactures some of the key raw materials in its own subsidiaries. Aside from this, the company does not solely depend on outside distributors to reach its customers. In fact, it has its own retail stores to distribute its products. In this scenario, which of the following alternatives to vertical integration is Rundofase International applying?

taper integration

Stark Industries Inc. manufactures airplane parts. It wants to globalize and is willing to spend a considerable amount to protect its intellectual property. Which of these business ventures makes the most sense for Stark Industries?

acquiring an airplane parts manufacturer in another country

Why is it difficult to imitate the organizational culture of firms like Southwest Airlines and Zappos?

Their culture reflects complex relationships with their employees, customers, and suppliers.

Goodsilron is a U.S.-based consumer electronics company. It owns smaller firms in Japan and Taiwan where most of its cell phone technology is developed and manufactured before being released worldwide. Which of the following alternatives to integration does this best illustrate?

parent–subsidiary relationship

Which of the following provides an example of a common drawback of a functional strategy?

Jack had a difficult time communicating efficiently with the manager of another department.

Which of the following provides an example of a firm in ared ocean?

R Us Apparel offered clothing at a price matching that of its competitors and, as a result, it had lower profit margins

Mary has been named CEO of an office furniture manufacturing company. As CEO, she is tasked with setting the firm's corporate strategy. Which of the following decisions is Mary most likely to make?

what range of products the firm should offer

Siobhan, the chief financial officer at an office furniture manufacturer in Canada, wants to build new plants in Canada rather than overseas. Which of these points should she make as she argues her case to the board of directors?

“It will be much more difficult to protect our intellectual property if we build factories overseas.”

Organizational culture can help a firm gain and sustain competitive advantage only if the culture makes a positive contribution to the firm's economic value creation and

obeys the VRIO principles.

Sirius Cybernetics Corp. produces touch-enabled wearable devices. Its research and development team recently became aware of a new, open-source technology produced by a firm overseas that would improve the processing speed and battery life of all Sirius Cybernetics devices. In this scenario, Sirius Cybernetics would be best served to embrace

open innovation

Todd is a strategist for a furniture manufacturer that has a large presence in the United States and Canada. By checking economic and political reports, he knows that trade and investment barriers are falling among wealthy nations. He also knows that the price of oil has dropped 50 percent in the previous two years. Based on this information, what action should Todd and his company take?

They should seriously consider globalization because of the falling trade and investment barriers.

The root cause of the principal–agent problem between senior executives and lower-level employees can be explained by the

the informational advantage of the lower-level employees.

A firm experiences diseconomies of scale when it

produces at an output level beyond the minimum efficient scale

Which of the following statements is true with regard to international trade between countries?

Wealthy countries engage in relatively more cross-border trade than poorer ones.

When a firm combines experience-based learning and process innovation, the firm

moves down the existing learning curve

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

It is more able to absorb price increases through accepting lower profit margins.

Micaela is the ethics officer at Oceanic Airlines, a publicly traded company. She wants to make sure that on-the-job consumption at Oceanic Airlines stays within legal and ethical bounds. Which action should she and the Oceanic Airlines board of directors take?

Set strict limits on what executives can spend on office redecoration or work-related celebrations.

Why does strategy implementation often require changes within an organization?

Strategy implementation transforms strategy into actions and business models.

Which of the following is a drawback of pursuing a transnational strategy?

It requires a global matrix structure, which is difficult to implement.

Finjob Inc. is following a related-linked diversification strategy, and Rangreen Inc. is following a related-constrained diversification strategy. How do the two firms differ from each other?

Finjob Inc. will share fewer common competencies and resources between its various businesses when compared to Rangreen Inc.

Trader Joe's differentiates itself from competitors by offering top-quality foods obtained through sustainable agriculture. This business strategy implies that Trader Joe's focuses on

Increasing the perceived value created for customers, which allows it to charge a premium price.