Download BUAD 453 Exam 1 Questions and Answers: Competitive Advantage and Strategic Management and more Exams Strategic Management in PDF only on Docsity!
BUAD 453 Exam 1 Questions And 100%
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Competitive Advantage - ANSWER If a firm can continually outperform its rivals, because the firm is able to earn profitability and grow more than others in the industry which is an example of ___________.
maximizing the return to shareholders is to focus on the customers and employees - ANSWER A tech company decides it should pay above-market wages to its top performing workers, reducing its shareholder returns in the short term. But the worker tenure pays off in sustained R&D and breakthrough products, which generates sales growth and reduces recruiting costs. This is an example of:
sustained competitive advantage - ANSWER a firm in the airline industry that has posted an ROIC above 25% for each of the past 5 years is ___________________________.
The strategic objectives of the organization will include a mix of performance goals towards the charity mission, revenue, and fundraising goals. - QUESTION a nonprofit organization is considering hosting a series of sessions to develop its mission, vision, goals, operation model and strategic plan. Distinguish between planning for charities versus for companies. How will the process be different for the nonprofit?
A strategic manager and the head of an entire division. They are responsible for translating the corporate strategy into concrete strategies for the business unit. -ANSWER A business-level manager in a multi-divisional company is:
Bhascar works with managers in his business to develop and implement specific plans for his division that are aligned with corporate goals. ANSWER Bhascar has just been named general manager of a new business unit formed by a multidivisional company. His first order of business will be to implement the strategic plan for the new division. Which of the following statements about Bhascar's position with the company is TRUE?
functional-level manager - ANSWER Lisa is the VP of sales and marketing for a software development company. She has been working with her sales force over the last several months to create a promotion strategy to sell obsolete software quickly at a lower price than the suggested price. What role of strategic manager is Lisa playing with this strategy?
setting the corporation's corporate mission and major corporate goals - ANSWER Which of the following, according to Hill and Schilling, would be an important part of a formal strategic management process?
what the corporation does regarding its customers, their needs, and through what core competencies. - ANSWER a mission statement describes:
customer centric - ANSWER Nike: "To inspire and innovate every athlete in the world."
This is an example of a _______________ mission statement
The Feedback loop- ANSWER The idea that the strategy making process is never really finished but instead changes constantly as new information emerges is:
Well-crafted objective - ANSWER My company has goals to launch a minimum of five new products every year for the next five years through a minimum annual 10% investment in R&D.
This is representative of a:
find strategies that exploit external opportunities, counter threats, build on strengths, and shore up weaknesses. - SOLUTION The primary task of managers conducting a SWOT analysis is to:
most often the local businesses are served by one of three large national HVAC service firms in addition to a number of smaller regional players. ANSWER An HVAC contractor is considering the addition of a new business line: commercial facility maintenance and service as an augmentation of its construction contracting. In contemplation of this potential strategy, the contractor embarks upon a strategic planning for this business unit and conducts an external and internal factors analyses for the business. Of the
vehemently argue against the majority strategy, searching for weaknesses in the plan. - ANSWER Adriana is vice president for product management for a Brazilian-based skin care company. As a functional leader she led a strategy planning process with her team to bring into the market a new tan-enhancing cream. After a sound strategy process, she and her team had built consensus around a deployment plan for this new product. They introduced the tan enhancer to a regional segment of the marketplace as a prototype. The sales were lousy. Through focus groups, the team learned that consumers didn't want the product.
Yet, Adriana forced her team to keep marketing it. She ran her deployment plan, launched it into the entire market, and provided a heavy and pricey TV and magazine ad campaign to promote it. Sure enough, just like in the regional trial, it became an utterly disastrous product with extremely limited sales. The executive team believed that the most significant failing in Adriana's strategy planning was in selecting this type of new product as the centerpiece of her strategy. Consider some possible techniques for improving decision making that might have helped Adriana avoid defects in her planning process.
prior hypothesis bias
illusion of control
escalating commitment
representativeness
astute use of power - ANSWER What are some cognitive biases that can lead to poor strategic decisions?
Representativeness - ANSWER Robert is the manager of sales and marketing for one of the products his organization sells. He was invited to join the strategic planning committee to help bring a new line of sunglasses to millennials. Robert, 25, was more enthusiastic than ever to develop a product he had something to put into. He was partial to the new sunglasses, and his three best buddies seemed to like them also when he showed the sunglasses to them. By the end of the planning session, Robert had convinced the team that they don't have to run expensive focus groups to test the market viability of sunglasses. He was very confident these shades would sell because each time he went out wearing a pilot pair of the sunglasses, he received lots of compliments on them. So, finally, the management team decided to go along with his strategy and didn't organize any focus groups before launching the new product. What is the cognitive bias working here?
So that they may acknowledge them when these biases are at play in the planning process and be able to consider for instance whether a decision is being made based on strategy or based on a "rule of thumb" or heuristic - ANSWER Why do strategic managers need to be aware of cognitive biases and be able to recognize them in their strategic planning process?
dialectic inquiry - to develop a plan and an alternate plan, in order to better perceive the complexity of and implications of a decision; compare the strategic plan against previous similar plans and review the results of those experiences for an outside view. Present an alternative point of view What are some techniques to improve decision making?
the overconfidence of leaders about their ability to create value by acquiring another company. - ANSWER The hubris hypothesis of takeovers is a term that describes:
- Willingness to Delegate and Empower
- Being well informed
- Commitment
- Outside view - ANSWER Experts in the study of strategic leadership have been able to identify the characteristics of the high performing leaders. What characteristics are some for strategic leadership?
Self-regulation - ANSWER Emotional intelligence refers to a set of psychological characteristics or attributes demonstrated by strong and effective leaders. What is one characteristic or attribute of emotional intelligence?
Jeffrey Pfeffer explains that the power of a manager was originally derived from control over resources, namely budgets, capital, positions, information, and knowledge. - ANSWER The use of power by the leader may impact his or her overall effectiveness as a strategic manager. Which one of these statements is true?
First, he needs to congratulate the team members for all the hard work they have been putting into the project up to date. Then he needs to explain that now the company is rethinking its priorities and does not want the project anymore. He needs to have as much information as possible regarding the employees' fate in relation to this change in
Potential competitors may enter an industry and begin to take market share from existing companies. What would be one of the largest challenges a new entrant would need to overcome to be successful when entering the industry?
defining the industry in terms of the customers it serves and their needs, rather than the products offered for sale and keeping its attention riveted on ensuring that its products serve the customer needs. - ANSWER Companies can alleviate the the substitute products force in the competitive forces model by:
customer switching costs - ANSWER A cable company, through research and development, has discovered a way to utilize its existing network lines to serve customers with a new product offering, home security systems. It is offering the service for a lower monthly fee than most security companies. This didn't stir much interest among its customers who already had a competitor's security system until the sales force started promoting reduced prices on equipment with no installation fees. Which competitive force is in action?
a company would have to bear switching costs since the products of the current supplier are unique. - ANSWER Suppliers are most powerful when:
suffer from excess capacity and price wars - ANSWER Industry competitive structure identifies the number and size of companies. Fragmented industries often:
Use heavy advertising to establish brand loyalty. - ANSWER Jonathan's company, Mobile Communications, is performing an industry analysis in developing new strategies for its five year strategic plan. The analysis indicates that recent government deregulation has decreased the barriers to entry and a number of start-ups are now entering the industry. Which of the following strategies could be part of the plan to offset this?
Threat of entry: because landscaping is a low-barrier industry, BrightView can achieve economies of scale in particular from discounts on bulk purchases of raw material inputs. ANSWER BrightView, the nation's largest landscape company with the merger of the two multi-state firms Brickman Group and ValleyCrest, formed a $2 billion firm in
- The company is operating within a fragmented industry that is dominated by small, local businesses. Which of the following identifies a relevant competitive force and a way the company might leverage it?
though being part of the same industry, companies can differentiate themselves by their distribution channels, market segments and other markers which shape their strategies. - ANSWER Strategic groups are a reality because of:
its immediate competitors, companies in its strategic group. - ANSWER The nearest and direct competitor to the profitability of an organization comes from:
By competing in the same strategic group, the two companies are facing customers who consider their products as direct substitutes for one another. - ANSWER Mattel is one of the world leaders in the toy industry with its line of Barbie dolls. However, Mattel started to face Bratz dolls from MGA Entertainment since the 1990s. Which of the following statements is true about the strategic group in which these companies compete?
identification of the new company's industry and strategic group. - ANSWER Ramon is working for a large company that contemplates starting a new business unit, which would sell personalized coffee mugs. Ramon has been assigned the preliminary research for the industry analysis. His analysis should start with:
force of the competitive forces of the industry shift. - ANSWER As an industry environment evolves over time, the:
growth - ANSWER An industry which is gaining many new customers due to increasing interest and education about it is:
Complementors: The industry are apt to have fewer complementors, with few products that would enhance the product or service when used together. - ANSWER As one analyzes the competitive forces model through an industry life-cycle analysis, what might be true for the following embryonic industry?
They have to develop the ability to identify critical points in the life cycle of an industry so they can better predict and prepare for the future. - QUESTION Why should strategic managers be interested in the life cycle of the industry their companies are part of?
are both creative and destructive, simultaneously rendering established products obsolete and opening up new product possibilities. - ANSWER The speed of technological change has quickened. Technological forces can influence the macroenvironment and give rise to conditions that may be:
The network will build a blended-use community that offers independent retirement living, assisted living, and skilled nursing care. - ANSWER The Baby Boomer generation is aging. A local healthcare network is looking at several expansion strategies. Which strategy might be the best response to this demographic force in the macroenvironment?
Political and legal forces - ANSWER A telecommunications company is impacted by the govt regulation of the wireless spectrum, cell tower locations, and Internet accessibility. The organization decides to retains a lobbying firm to represent its interest with the U.S government, especially to the FCC, FTC and Congress. This is an example of a company managing what type of forces in the macroenvironment?
is utilizing a macroenvironment force as an opportunity to attract new customers and thereby revenue? ANSWER An online travel site advertises that this is a very good time for Americans to visit Europe because the strength of the U.S. dollar abroad enables tourists to spend less for a great experience.
This is an example of :
firm-specific capabilities/competencies that allow a firm to differentiate its products from the competitors or to obtain lower costs than the competitors. - ANS A competitive advantage is based upon distinctive competencies. By definition, these are:
both the physical elements of production, such as machines and workforce, and also the knowledge and know-how of how to make and sell a product or service. - ANSWER A firm can develop its competitive advantage through its resources. Resources include:
oversee the filing of necessary patent documents for the new medicine in order to secure a firm's intellectual property. - ANSWER Candace is the manager of research and development at a pharmaceutical company. The company is currently developing a
new heart medication that may prove to be more effective than current treatments for a number of heart conditions. In order to maximize the profitability of the company once the new medication has been approved by the FDA, Candace should:
a distinctive competency. - ANSWER A chain of grocery stores decides to keep its size and scope small by only offering what management deems as the 'best' product in every food category; this reduces the choices for its customer base. A very expensive staff of tasters, hired at high salaries, globe-trot to sample foods to bring into its stores. It has attracted a team with a great track record of selecting bestsellers and earned a reputation for its high-quality products. This is an example of:
Toyota's lean manufacturing systems - ANSWER Compare the resources for each of the following four companies. Which resource represents an advanced factor of production, specifically a competency in process knowledge?
a. Starbucks' locations in downtown areas
b. General Motors' union workforce
c. Kellogg's food processing equipment
d. Toyota's lean manufacturing systems
process knowledge or organizational architecture that are path dependent and the consequence of the history of the company. - ANSWER Rare resources include:
take steps to protect these assets either formally or as a trade secret, optimize the company's use of them and not outsource them to other firms. - ANSWER Advanced factors of production are more likely to be rare and harder to imitate. Strategically, managers who have identified these advanced factors should:
casual ambiguity ANS It is difficult or impossible for competitors to imitate a firm's rare and valuable process knowledge elements, since such knowledge often is unwritten, held by a large number of team members, and kept secret within the firm. This is a case of
begin analyzing each resource to see if it can facilitate the firm's exploitation of an opportunity in the industry, if it is a resource that competitors either don't have or would
three objectives-increasing value as perceived by the customers, allowing the company to increase price that it charges, or reducing costs of producing products. Which of the following actions by a car manufacturer would be part of a short-run strategy of increasing profitability by creating value, increasing price, or decreasing cost?
adds value to the product at each stage of the chain. - ANSWER A company's functional activities convert its inputs into outputs, and:
designing, building, and delivering a product and activities supporting primary activities. - ANSWER A value chain includes
new product development, product improvement, and process enhancement to lower the production cost of existing products. - ANSWER Which of the following is one value chain area focused on the following?
reduction in the cost of procurement, production, distribution in order to create profit. - ANSWER Materials management can add value by:
Research and development ANSWER An entrepreneur is starting a new Internet-based service for job finders. He is evaluating his internal capabilities to identify his distinctive competencies. He wrote his software to handle a huge volume of job seekers at the same time without slowing down. The result is a system that works faster compared to the competitors' systems. To what value chain activity does the software development correspond?
The Dove campaign for real beauty, which shared findings on women's assumptions about beauty, reaped the benefit of increased sales of the company's products just months after the campaign was launched. ANSWER Which of these represents a marketing and sales-related value added activity in the personal care industry?
labour productivity and capital productivity. - ANS Efficiency implies the quantity of inputs that must be used to achieve a given level of output. It can be measured by the following:
products are perceived by customers to have attributes which are more useful, or to be more valuable, to them than the products pushed by competitors. - ANS A product's quality is considered superior if :
work in research and development to create superior product attributes and/or superior processes for delivering products. - ANSWER Innovation is the result of:
serving customers quickly with quality products, meeting their after-sale service and follow-up needs, and developing new products to fill unmet customer needs. - ANSWER Customer responsiveness includes:
identify the building blocks of competitive advantage and develop strategies to use them to increase profitability. - ANSWER Carol is a vice president for sales and marketing at her company. She conducts a survey asking customers their impressions of the product offering, the quality of the product, and their level of customer satisfaction. Carol can use the survey results to:
Efficiency: It is seeking to partner with a food pantry to purchase food at lower prices than what the nonprofit has been buying from the supermarket with the previous food supplier. - ANSWER A nonprofit organization plans to provide hot meals for homeless people. These meals will be served from a local church. The organization is "looking to invite and serve all the homeless people within a 20-mile radius from the church". Which option best aligns with the goal for each strategy?
Because customers have asked the restaurant to include healthier options on its menu, it reformulates its best-selling sandwich to replace its processed ingredients with fresh vegetables. - ANSWER The four building blocks of competitive advantage are self-reinforcing. Which of the following is a multi-factor strategy that improves several aspects of a value chain through a succession of activities?
Takata Corp recalls 34 million air bags installed on a wide range of different car brands. This may be due to potential faults and defects within the air bags. - ANSWER Which of the following companies in the news over the past couple of years would be best helped by a strategy aimed at improving quality in order to create and sustain its competitive advantage?
