17.Which of the following companies uses a low-cost leadership strategy?

1. Starbucks
2. Walmart
3. Cadillac
4. IHOP

18. Which of the following companies uses a focused differentiation strategy?

1. Costco
2. Walmart
3. Rolls Royce
4. IHOP

19. Which of the following factors limits a firm's set of strategic choices?

1. resources
2. cost structure
3. distinctive competencies
4. all of the above can limit strategic choices

20.Overly optimistic forecasts of market share can lead a firm to:

1. overestimate sales
2. underestimate competitors' responses
3. overestimate profits
4. overestimate ROI
5. all of the above may be wrongly estimated

21. Integration strategies include both forward integration and backward integration.True / False

22. Diversification is a good strategy when the current industry is experiencing significant growth. True / False

23. A manufacturer of men's clothing is opening a chain of retail men's clothing stores. This is an example of:

a. cross country integration strategy

b. vertical integration strategy

c. horizontal integration strategy

d. backward integration strategy

24. Which of the following is an argument for real options reasoning for strategic flexibility?

a.	The organization should adapt to changes in its environment.	c.	It is difficult to maintain success through a single strategy.
b.	Risk is inherent in any strategy, but over time probability of an event can be determined more accurately.	d.	All of the above are arguments for strategic flexibility.

25. A land drilling oil company is acquiring another company that focuses on offshore drilling. This is an example of:

a. cross country integration strategy

b. vertical integration strategy

c. horizontal integration strategy

d. diversification strategy

26. Introducing new products to locations in which a firm already operates is referred to as a horizontal diversification strategy.True / False

27. A firm that acquires a competitor that operates in a different state is referred to as a vertical integration strategy. True / False

28. The bargaining power of buyers increases when buyers are concentrated, or each one purchases a significant portion of the industry's sales. True / False

29. A long-term labor agreement can be an example of an exit barrier. True / False

30. The bargaining power of suppliers is high when there are no substitutes. True / False

31. The objective of Porter's five forces model is to

a.	assess firm profitability.	c.	emphasize the intensity of rivalry within an industry.
b.	assess the potential for profits within an industry.	d.	None of the above.

32. An industry is

a.	not the same as a firm.	c.	not always the most important factor in determining a firm's performance.
b.	often difficult to define.	d.	All of the above.

33. A firm's industry

a.	is synonymous with its macro environment.	c.	always has the greatest influence on a firm's performance.
b.	can be difficult to define.	d.	None of the above.

34. Intensity of rivalry in an industry is a function of all of the following EXCEPT

a.	the concentration of competitors.	c.	high exit barriers.
b.	slow industry growth.	d.	government policy.

35. Exit barriers from an industry include

a.	strategic factors.	c.	economic factors.
b.	emotional factors.	d.	All of the above.

36. The decline in unit costs of a product that occurs as the absolute volume of production increases is known as

a.	factor analysis.	c.	economies of scope.
b.	industry economies.	d.	None of the above.

37. Switching costs are incurred by

a.	the buyer.	c.	both the buyer and the seller.
b.	the seller.	d.	neither the buyer nor the seller.

38. Barriers to entry may be associated with

a.	cost advantages related to the quantity of production.	c.	Both A & B
b.	cost advantages independent of size.	d.	Neither A nor B

39. Pressure from substitute products occurs from

a.	inside the industry.	c.	Lack of complementors
b.	primary competitors.	d.	None of the above.