QUESTIONS
Only large companies that trade their stock on a major stock exchange need to use an effective strategic management process.
Managers can use the Industrial Organization (I/O) model to identify strengths and weaknesses in the external environment.
Managers can use the Industrial Organization (I/O) model to identify opportunities and threats in their firm’s external environment.
In an organizational context, ethics reveal a value system that has been widely adopted by the firm’s employees.
The final responsibility for effective use of the strategic management process rests with the firm’s top strategic leaders.
In the fashion industry, Louis Vuitton’s competitive advantages in product design and manufacturing are critical to the firm’s success.
Firms that manage their relationships with internal and external stakeholders better than competitors might gain a competitive advantage.
Managing relationships between the firm and its stakeholders is difficult because satisfying one stakeholder’s needs may come at the expense of another stakeholder.
In order to be successful, strategic leaders must only make revolutionary changes when they are new to an organization.
A company’s mission statement should be more concrete than the vision.
A homogeneous top management team is more likely to make major mistakes than a heterogeneous top management team.
When a new CEO is selected from within the company, she/he is less likely to make drastic strategic changes than when an outsider becomes the new CEO.
At times it is hard to tell whether a succor is an insider or an outsider.
Companies develop employee training programs to enhance their human capital.
Innovation is a hallmark of companies with entrepreneurial cultures.
General Mills has found success by resisting the trend toward healthier products.
All related-party transactions are unethical.
Corporate governance begins with the Board of Directors.
When companies like Home Depot and Lowes analyze the external environment they are trying to understand how demographic trends might impact future profitability.
Income growth or decline, savings rates, and currency exchange rates are examples of economic trends. One reason that managers analyze conditions in the external environment is to help them select a strategy to implement.
Imagine that you are in your final semester of college and you decide to transfer to a different school. This decision probably involves few, if any switching costs.
Licensing and permit requirements in liquor retailing and banking are examples of barriers to entry that are based on government policy.
Substitute products pose a strong threat when they are more effective and priced lower than your existing products.
Electronic Arts (EA) is a powerful supplier in the electronic game industry. As a result, EA’s actions can reduce the profit potential of companies that make electronic game boxes, such as Sony, Microsoft and Nintendo
A company’s motivation to leverage its resources and capabilities to reach its vision is known as market dependence.
Companies with high market dependence are likely to respond strongly when competitors attack their market position.
In order to develop and implement the best strategy, managers must understand what results the company’s resources and capabilities will make possible.
One of McDonald’s capabilities is in employee training.
Between 2004 and 2007 McDonald’s financial performance was negative.
Managers hope to identify their company’s strengths, weaknesses, opportunities and threats by conducting an internal analysis.
Manufacturing equipment and financial capital are examples of valuable tangible resources that contribute to creating value for customers.
It is easier to evaluate a firm’s tangible resources than its intangible resources.
When a company purchases an asset or resource, such as land, with the intention of holding onto it and using it for future expansion, the company has purchased an “intangible option.”
Most competitive advantages can be sustained for a very long period of time, if not forever.
The value chain consists of the structure of activities that a firm uses to successfully integrate acquisitions into their resource portfolio.
The value chain refers to how efficiently a firm manages its production process
When a firm is unable to complete a value chain activity in an efficient manner, that activity becomes a prime candidate for outsourcing to another firm that can perform the activity more efficiently.
When a firm creates value for customers by performing activities that its competitors can’t perform, the firm is said to possess
PetsMed.com uses the Internet and telemarketing to sell its products to customers. This set of actions taken by PetMed.com after it selected its strategy is known
Individuals who practice strategic leadership, such as Steve Jobs of Apple are known as
Respecting the contribution of each employee and continuous innovation are important values in 3M’s ____.
According to Table 1.2 in the text, McDonald’s vision is “to give each customer, every time, an experience that sets new standards in value, service, friendliness, and quality.” Given this vision, which of the following might be considered to be part of McDonald’s DNA?
The process of putting strategy into action is known as
Which of the following characteristics IS NOT a key feature of strategic management?
Inventory management and distribution competitive advantages have allowed ____ to become the largest grocer in the United States.
According to the resource-based view of the firm (RBV) model, what is the most likely source of competitive advantage for any firm?
According to the text, Louis Vuitton, the world’s most profitable luxury brand, has skills that are superior to its competitors in which of the following areas?
Chapter one introduces two different models that can help companies select and implement the most effective strategy. Which of these models suggests that managers should determine what the firm’s resources allow it to do better than the competition?
Which of the following would be an example of a stakeholder withdrawing her/his support for a company’s strategy?
From which of the following stakeholder groups do companies usually receive capital (i.e. money) to finance their continuing operations?
Which of the following IS NOT considered to be an external stakeholder group?
Which of the following represents a decision that strategic leaders must make when using the strategic management process?
According to the text, under what condition can an organization’s culture be a strong motivator of excellent performance by employees?
Tyco’s new CEO Ed Breen believes that strategic leaders should
Which of the following companies operates with the vision to “dramatically change the industries within which it competes?”
A top management team that consists of people from different functional backgrounds and a variety of experience is considered to be
Which company’s “ten-step talent” management development program is considered one of the most effective programs for developing strategic leaders?
Which of the following types of CEO succession has the greatest potential to motivate employees to perform well?
Buildings, manufacturing plants, offices, machinery and computers are all examples of
Human capital, intellectual property and social capital are examples of
Which of the following resources includes the knowledge and skills of the people working for the firm?
Entrepreneurial cultures
According to the text, how can strategic leaders promote integrity and ethical behavior?
Opportunistic behavior on the part of strategic leaders at Enron and Tyco has lead to an increase in the importance of
Which of the following statements concerning an entrepreneurial culture IS INCORRECT?
In recent years, institutional investors in U.S. firms have demanded that boards of directors include more independent outsiders than inside officers. Why do these investors prefer independent outsiders on boards of directors?
Which of the following agencies is responsible for scrutinizing related party transactions?
Which of the following is the BEST way for a company to ensure that performance standards are met and employees do not misuse the firm’s resources?
What type of control system focuses primarily on generating sales revenue, maintaining reasonable expenses and remaining solvent?
Which of the following positions WOULD NOT be considered to be part of a company’s top management team?
Which of the following statements concerning the leadership of the Board of Directors IS CORRECT?
The increasing Hispanic population in the United States is a example of a(n)
Conditions in a firm’s general, industry and competitor environments with the potential to “prevent the firm from successfully using its core competencies” are known as
The increase in the number of Hispanic consumers in the United States reflects which of the following demographic trends?
In which of the following countries or regions is the emphasis on saving the environment the STRONGEST?
Which of the following technological trends has played a significant role in the global economy?
Companies that develop policies to reduce waste going to landfills are addressing which of the following?
Which of the following IS NOT a potential barrier to entry?
When a firm experiences improvements in efficiency as it incrementally increases its size, the firm is said to have created which of the following barriers to entry?
The “one-time costs that customers incur when they decide to buy a product from a different supplier” are known as
When a supplier is able to increase the price of its product or reduce the quality of the product while maintaining the same price, that supplier possesses significant
As industry growth slows
Which of the following IS NOT an example of an exit barrier?
Which of the following products would be considered the BEST complementor to a personal computer?
What is the primary reason why managers conduct an internal analysis of their company’s resources and capabilities?
The full set of resources that a firm holds is known as its
The “value” of a tangible or intangible resource is determined by
When few, if any, competitors can perform a value chain activity with the same level of quality, then that competence is said to be
In order to be successful, a company must create value that
Which of the following IS NOT a reason firms outsource the performance of an activity to an external supplier?
What is the primary reason that a firm should decide to outsource a value chain activity?
The probability of achieving outsourcing’s benefits increases significantly when the reasons for using outsourcing are
Which of the following does LG Electronics NOT consider to be a core competency?
Which of the following is the BEST example of a firm’s investment in a “real option?”
According to the text, which of the following companies is well-known for its innovation capability?
In order for a core competence to be considered a competitive advantage it must meet all of the following criteria EXCEPT
Developing the top management team and a plan for management succession are important strategic leadership actions.
In order to develop and implement the best strategy, managers must understand what results the company’s resources and capabilities will make possible.
Which of the following represents a decision that strategic leaders must make when using the strategic management process?
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