Capstone |120 Quiz exam 1 Practice Questions Containing Answers|34 Pages
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Course
Capstone
Institution
Capstone
A _____ is a picture of what the firm wants to be and, in broad terms, what it wants to achieve.
a. mission
b. vision
c. capability
d. competitive advantage - ️️vision
A business-level strategy is:
a. a marketing and positioning program designed to explain a business to its customers.
b....
A _____ is a picture of what the firm wants to be and, in broad terms, what it wants to achieve.
a. mission
b. vision
c. capability
d. competitive advantage - ✔ ✔ vision
A business-level strategy is:
a. a marketing and positioning program designed to explain a business to its customers.
b. an integrated and coordinated set of commitments and actions the firm uses to gain a competitive
advantage by exploiting core competencies in a specific product market.
c. the actions the firm takes by selecting and managing a group of different businesses competing in
different product markets.
d. a set of actions and commitments through which the firm sells its products outside of its domestic
market. - ✔ ✔ an integrated and coordinated set of commitments and actions the firm uses to gain a
competitive advantage by exploiting core competencies in a specific product market.
A capability is considered rare when:
a. it helps a firm to neutralize any threats against it.
b. it is possessed by few, if any, other firms.
c. its cause is ambiguous.
d. it has no strategic equivalents. - ✔ ✔ it is possessed by few, if any, other firms
A capability meets the criteria of being valuable when:
a. it requires an investment of half of the company's financial assets.
b. it is possessed by only the top tier of companies in the sector.
c. it helps a firm exploit opportunities in its external environment.
,d. its causes and uses are unclear. - ✔ ✔ it helps a firm exploit opportunities in its external
environment
A company has identified a core competency in providing telecommunications services for mid-sized
businesses through a combination of simple technology and software, excellent customer service, and
low-cost hardware. As competitors gain ground in competing for mid-sized companies, this core
competency might become a core rigidity if the:
a. company starts to target smaller businesses with its bundle of capabilities.
b. company chooses to shift its focus to large-scale enterprises to offer its products and services.
c. company doesn't keep up with advances in technology and customers begin to expect greater value
from the technology.
d. cost of hardware rises, thereby increasing the company's costs of production. - ✔ ✔ company
doesn't keep up with advances in technology and customers begin to expect greater value from the
technology
A company has just invented a piece of equipment that uses a camera to ensure that drivers do not
leave a child or pet unattended in the vehicle. This new product falls under which of the following
segments of the general environment?
a. Technological
b. Political/legal
c. Global
d. Sociocultural - ✔ ✔ technological
A company is analyzing its value chain to discover its value-creating activities. While formulating its
strategy, the firm will:
a. consider the value chain activities and support functions to determine which activities contribute the
greatest value in the product or service being sold to customers.
b. create functional departments to manage these activities.
c. expand into multiple markets to serve as many customers as possible with its value-creating activities.
d. prioritize only its support functions as a source of competitive advantage. - ✔ ✔ consider the
value chain activities and support functions to determine which activities contribute the greatest value
in the product or service being sold to customers
,A company is debating whether to enter a new industry. The first order of business is to conduct an
analysis of the five forces. Why is this a crucial first step in the decision-making process of entering a
new industry?
a. If the barrier for entry is low, and suppliers and buyers have strong bargaining positions, the venture
will most likely fail.
b. If the barrier for entry is high, and suppliers and buyers have little bargaining power, the venture will
most likely fail.
c. If the barrier for entry is low, and suppliers and buyers have strong bargaining positions, the venture
will most likely succeed.
d. If the barrier for entry is high, and suppliers and buyers have strong bargaining positions, the venture
will most likely succeed. - ✔ ✔ if the barrier for entry is low, and suppliers and buyers have strong
bargaining positions, the venture will most like lyfail
A company owns a patent, with six more years of protection, on a prescription medication that is used
by people around the world. This resource is:
a. rare and valuable.
b. nonsubstitutable and valuable.
c. costly to imitate and nonsubstitutable.
d. an example of outsourcing. - ✔ ✔ rare and valuable
A construction company is pursuing a focused differentiation strategy, and after reviewing its core
competencies, the leaders have decided to specialize in hospital construction. Which of the following is
an example of how that strategy is addressing the bargaining power of buyers (customers)?
a. The company accepts a lower profit margin rather than raise prices after its supplier of medical
regulators raises prices.
b. The company participates in competitive bidding processes, and despite often submitting a higher bid
than competitors, it is awarded the job based on its expertise.
c. In a year where only a few hospitals are being built, the company's leaders decide to offer discounted
pricing to customers to ensure that they have a steady stream of work.
d. Seeing the success of the hospital construction company, other construction firms decide to narrow
their focus and create business units dedicated to this custom - ✔ ✔ the company participates in a
competitive bidding processes, and despite often submitting a higher bid than competitors, it is awarded
the job based on its expertise
A core rigidity arises when a:
, a. core competency generates inertia and stifles innovation, often because of conditions in the external
environment.
b. corporation refuses to change its strategies without an action by the board of directors.
c. company puts all of its strategic decisions up for a vote by the company employees.
d. firm is led by a CEO with a rigid sense of mission that cannot be swayed. - ✔ ✔ a core competency
generates inertia and stifles innovation, often because of conditions in the external environment
A cost leadership strategy is one in which:
a. customers perceive a company's products to be superior to competitor products.
b. a company uses process innovations, such as advanced production or distribution methods, to
operate efficiently.
c. a firm produces nonstandardized products that deliver superior value to customers through
innovation.
d. a firm must consistently upgrade its product features to keep pace with customers' expectations for
value. - ✔ ✔ a company uses process innovations, such as advanced production or distribution
methods, to operate efficiently.
A differentiation strategy is one in which a firm:
a. concentrates on ways to reduce cost as its primary focus.
b. creates products that have features that customers value and are willing to pay a higher price for.
c. has core competencies in production and distribution efficiencies to reduce required inputs.
d. divides its customers into clusters of people with similar needs. - ✔ ✔ creates products that have
features that customers value and are willing to pay a higher price for
A firm should analyze its internal organization as part of the strategic management process because:
a. the firm is required to report its results to the government.
b. it is the only method for identifying threats and opportunities to the business.
c. without this study, strategic leaders do not have a working understanding of how their business
operates.
d. it provides the insights the firm requires to match what the firm can do with what the firm might do
when formulating strategies. - ✔ ✔ it provides the insights the firm requires to match what the firm
can do with the firm might do when formulating strategies
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