Deck 6: Defining the Organizations Strategic Direction

Question 1

Kingsize Burgers says it will develop a core competence in good tasting French fries.This is a core competency that is unlikely to give the company a sustainable competitive advantage.

Answer 1

True

Question 2

According to Porter's value chain model,firm infrastructure is a primary activity.

Answer 2

False

Question 3

The Adamus Corporation was the maker of the best metal pole for pole vaulters.It hired metallurgists and encouraged the study of metals within the company.When fiberglass poles hit the market and Adamus sales plummeted,it realized it suffered due to core rigidities.

Answer 3

True

Question 4

The balanced scorecard emphasizes measuring performance from primarily a financial perspective.

Question 5

In Canada,the wireless market is dominated by three main players-Rogers Wireless,Bell Mobility,and Telus.This is an example of an oligopolistic industry.

Question 6

Ammunition can be considered a complement for the companies who make firearms.

Question 7

The percentage of repeat purchases can be used to measure organizational performance from the internal perspective.

Question 8

In formulating a technological innovation strategy,the first step first involves an accurate appraisal of where the firm currently is followed by the articulation of its strategic direction.

Question 9

A firm's intellectual property can act as an entry barrier for other firms.

Question 10

A stakeholder analysis emphasizes the stakeholder management issues the firm ought to attend to due to their ethical or moral implications.

Question 11

Firms may utilize the capabilities of other firms in order to overcome certain entry barriers.

Question 12

If a firm's product is undifferentiated,buyers will typically experience lesser bargaining power.

Question 13

When using the five-force model to assess industry attractiveness,the analysis is focused at the firm level,treating all competitors as unique,and its objective is to ascertain whether the firm can survive within the industry.

Question 14

Since the commercial aircraft industry is oligopolistic,one would expect the rivalry to be modest to low.

Question 15

The Saturday Evening Post bought the paper mills that supplied the paper for printing the magazine.This is an example of horizontal integration.

Question 16

The Zippo Company has identified 30 capabilities so it now knows its core competencies.

Question 17

The goal of reducing employee accidents by 5% would reflect the innovation and learning perspective of the balanced scorecard.

Question 18

A music downloading software and an MP3 player are substitutes for one another.

Question 19

Organizational aptitude refers to those abilities that make a firm more agile and responsive to change.

Question 20

The Friedman Clinic in Switzerland is said to have the best cosmetic surgeon in the world for rhinoplasty,so many people travel from all over the world for this service.This is a core competency of the clinic that can easily be copied.

Question 21

Which of the following would describe a primary activity according to Michael Porter's model of the value chain?

A) The human resource activities of Wal-Mart
B) A Wal-Mart advertising campaign
C) The accounting function at Wal-Mart
D) The development of new scanning equipment at Wal-Mart

Question 22

Many people dream of opening their own restaurant someday and restaurant supply houses provide easy financing for equipment.This is one of the reasons why the _____ in this industry is so high.

A) failure rate
B) exit barrier
C) threat of entry
D) technological breakthrough

Question 23

Which of the following strengths would competitors least likely be able to copy?

A) Mountain Home University begins an evening program for adults in which students take one class two nights per week for one month.
B) Measurement Systems comes out with a blood sugar monitoring device that works with an insulin pump that diabetics already use.
C) Kingdom Investments' chief stock analyst has been able to provide investors with a 20% return on investment for the last 10 years.
D) Choice Brands introduces a new cereal with dried fruit.

Question 24

Other things being equal,if a buyer can threaten to vertically integrate backwards,this will

A) decrease the buyers bargaining power.
B) increase the buyers bargaining power.
C) have no effect on the buyers bargaining power.
D) lower the threat of entry into the industry.

Question 25

Which of the following would be an example of a tacit resource?

A) An odds maker who works for a large casino in Las Vegas and is correct 95 percent of the time.
B) A highly effective and efficient distribution network throughout the continental U.S.
C) A retail shoe chain that has prime locations in 200 malls across the country.
D) A flashy ad campaign for a malt liquor.

Question 26

Other things being equal,the more suppliers there are providing similar supplies to a particular industry,

A) the less powerful those suppliers will be.
B) the more powerful those suppliers will be.
C) the more competitors there will be in the industry.
D) the less powerful buyers will be.

Question 27

Socially complex resources refer to

A) resources or activities that emerge through the interaction of multiple individuals.
B) resources that cannot be defined in terms of a numerical value.
C) resources that require public sanction in order to be utilized for profit-making purposes.
D) resources that are shared by different parties thereby necessitating the need for legal intervention.

Question 28

When Western Franchise Services announced is plans to go international in the next 15 years,it was expressing its

A) core competence.
B) future business model.
C) strategic intent.
D) core capability.

Question 29

Pine Street Knitting Mill was not making a profit on its textile lines,but was reluctant to withdraw from textile manufacturing because it had so many sewing machines and workers who knew how to use them.Pine Street was suffering from

A) creeping obsolescence.
B) exit barriers.
C) sentimental proclivity.
D) attitudinal cohesiveness.

Question 30

The teamwork of the Super Bowl champions in the National Football League is an example of a(n)_____ resource.

A) imitable
B) socially complex
C) causally ambiguous
D) durable

Question 31

When Poduck Memorial Hospital changed its name to Poduck Regional Medical Center,it also unveiled a plan to build a medical tower doubling its physical facilities by 100% within the next 10 years.It announced that its goal was to not only serve Exeter County,but the entire region including the 5 contiguous counties.This is an expression of

A) progressive competitiveness.
B) strategic intent.
C) core competencies.
D) alliance building.

Question 32

Dr.Stone wanted to get a good deal on a laser which would help him in providing sight-correcting surgeries.He soon found out that prices were not very negotiable.This might be due to the fact that

A) the bargaining power of suppliers is high because there are so few of them.
B) the industry is heavily regulated by the government.
C) supply exceeds demand.
D) laser manufacturing companies are not allowed to discount their products.

Question 33

Xerox is noted for the quality of its copy machines and service.This can be considered as Xerox's

A) strategic intent.
B) core competency.
C) core rigidity.
D) external opportunity.

Question 34

When the Arizona grocery store chain,Smitty's,told Associated Grocers (AG)to give them a bigger price discount or they would open their own warehouse and distribution center,AG listened because Smitty's was a big customer.This is an example of the

A) bargaining power of buyers.
B) bargaining power of sellers.
C) threat of substitutes.
D) technological substitution.

Question 35

Pacer Corporation had formed a steering committee that had gathered a list of capabilities within the company.The list was analyzed and candidates' core competencies were identified.Next,Pacer should

A) communicate these competencies throughout the company to engender loyalty to them.
B) test the candidates' core competencies with the Prahalad and Hamel criteria.
C) align its strategy in accordance with this list.
D) ask the entire company to vote on the list.

Question 36

Mountain Home University realized that due to the "war on terrorism" some potential students were joining the military while others were choosing technical training.It could be said that the military and technical training were _____.

A) opposites.
B) imitations.
C) substitutes.
D) complements.

Question 37

At a strategic management retreat,Pentel Corporation discussed questions such as "Does this ability make us unique?","Does it cove a range of businesses?",and "Is it hard to imitate?".It would seem that Pentel is trying to

A) figure out what it does.
B) change strategic directions.
C) identify its core competencies.
D) discover its threats and opportunities.

Question 38

For several years,Mountain Home University had used IBM computers.Recently,Apple Computers offered them a better machine at lower a price for one of the University's labs; however Mountain Home did not buy them because the _____ costs were too high.

A) transactional
B) opportunity
C) marginal
D) switching

Question 39

Apex Corporation supplies hospitals with software to track insurance claims.Since insurance regulations and policies are always changing,Apex needs to have the ability to be agile and responsive to change.In other words it needs

A) dynamic capabilities.
B) shifting competencies.
C) respondent capability.
D) floating capabilities.

Question 40

Honda's core competencies lie in manufacturing and innovation which it has used to create its world renowned engines.These engines are also used in Honda's portable generators,lawn mowers,motorcycles,automobiles,and several other products.According to the comparison made by Prahalad and Hamel,Honda's portable generators are

A) the fruits.
B) the trunk of the tree.
C) the branches.
D) the roots.

Question 41

Which of the following goals best represents the business process perspective of the balanced scorecard?

A) Improve customer loyalty by 50%
B) Develop five new products
C) Double net worth
D) Reduce excess inventory

Question 42

Explain why Prahalad and Hamel compare core competencies to roots.

Question 43

Even though many aerospace manufacturing firms are very profitable,there are very few upcoming firms.Explain the reason for using at least one force from Porter's Model.

Question 44

The balanced scorecard

A) is an alternative accounting technique.
B) is a method for balancing assets with liabilities and equity.
C) emphasizes four perspectives the firm should take in formulating goals.
D) helps managers evaluate all aspects of an employee's performance.

Question 45

Go Systems set a goal to double its corporate value in seven years.This is a goal from the_____ perspective of the balanced scorecard.

A) operational
B) financial
C) technical
D) internal

Question 46

Which of the following goals best represents the learning perspective of the balanced scorecard?

A) Improve customer loyalty by 50%
B) Improve new product development
C) Double net worth
D) Reduce excess inventory

Question 47

What is the danger of not having a strategic intent? In your answer assume you are a hospital in a city with a population of 30,000 people,located about 50 miles away from a large city.

Question 48

Recently,three cell phone companies announced the addition of a nationwide "walkie-talkie" service to supplement their regular cell phone service.Will this be a sustainable competitive advantage? Justify your answer.

Question 49

Explain the advantages and disadvantages of rewarding and promoting development of the core competency.

Question 50

The Food Baskets grocery chain set a goal to reduce their stock out rates by 20 percent.This is a goal according to the _____ perspective of the balanced scorecard.

A) internal
B) logistics
C) operational
D) learning

Question 51

Mountain Home University has announced a plan to begin offering more graduate programs and off-site classes in nearby cities in order to become the largest provider of such programs in the region.This is their strategic intent.What should the university do next?

A) Identify resources and capabilities to make this happen.
B) Petition government agencies for permission to spread beyond its traditional markets.
C) Reduce on-campus and undergraduate enrollments to divert resources to this new strategic initiative.
D) Hire a new vice-president to head up the new effort.